Despite the slowdown in the growth of electronic commerce after its ‘boom’ during the pandemic, which has led the giant Amazon, for example, to lay off 18,000 of its workers or to postpone investments in new warehouses planned in our logís vive real estate in Spain its “golden age” as all industry reports are. And, after a year of record investment in 2019, those same reports predict “solid” growth in 2023, somewhat more moderate in the first half, although a change in the model: “logistics real estate will grow, above all, from of ‘turnkey’ projects and not in risky operations”.
Heylen Warehouses has acquired its first land in Spain and after Belgium, the Netherlands and France, the company is committed to our country with a real estate project of 15,000 square meters in the Iberum Central Platform in Illescas (Toledo). Logicor, for its part, has begun the development of a turnkey logistics asset of more than 16,000 square meters and with 20 loading docks for Trace Logistics, the logistics operator of the Fluidra group, a swimming pool equipment and solutions company. These are just two examples of the good health of the real estate logistics sector in Spain. A sector that last year exceeded 1,900 million euros of investment at the end of the year, with growth of 6.3% compared to 2021, according to data from Savills in its report on the logistics real estate sector in Spain.
Thus, according to CBRE, the industrial and logistics segment concentrated in 2022 between 12% and 14% of the total real estate investment in the country. And it is that the real estate company closed 2022 with 1,200,000 square meters contracted only in the central peninsular area. “A record figure that shows that the real estate logistics market is solid and that it continues to grow despite adversities,” according to Miguel Monreal, Director of Business Development at GLP Spain (a company that develops logistics parks). And “I think that a very promising 2023 awaits us despite the sorrows,” he predicts. And it is that, as Basilio González, from Dunas Capital Real Estate, believes, “the sector is experiencing a golden age”, in quantitative and qualitative terms, “and from being a residual sector” it has become a main actor and “tractor of the Spanish economy”.
BNP Paribas Real Estate highlights in its latest investment report in the logistics market in Madrid, Catalonia and Valencia the high demand in the three communities, where investors are looking for opportunities in real estate assets for logistics. Thus, in 2023, “developers and investment funds will continue to acquire land to develop new platforms.” It is expected that 830,631 square meters (m2) of projects that are under construction will be incorporated into the Madrid market. For its part, in Catalonia the figure stands at 395,000 m2 and in Valencia 196,313.
The three large Spanish logistics ‘hubs’ are the central area, Catalonia and Valencia -the latter two at the risk of their two large seaports-. And, for example, in the center the demand for logistics spaces has once again marked a milestone in the historical annual series with notable operations such as the 98,000 m2 operation in Illescas (Toledo); the self-promotion of an 80,000 m2 platform in Torija (Guadalajara) and the signing of a 50,316 m2 ‘turnkey’ project for the 3PL logistics operator in Marchamalo (Guadalajara). Thus, the axis of the A2, popularly known as the Henares corridor, once again positions itself as the favourite, concentrating more than half of the operating firms in the fourth quarter and 45% of the contracted area, with a total of 197,177 m2 contracted in twelve operations.
In Catalonia, for its part, there are almost one million buildable square meters of land that can be incorporated into the market throughout the year 2024. However, it should be noted that many owners do not intend to develop this area without having a engaged customer. In the last quarter of the year, the demand for logistics spaces in the Valencia metropolitan area has maintained the high dynamism registered in the first part of the year. The year 2022, concludes from BNP Paribas, has been the period with the most contracts signed with operations such as a 20,360 m2 lease in Sagunto and the signing of a 13,000 m2 platform in Ribarroja. The same report highlights that the outlook for 2023 is positive. “The good moment that demand is going through, the existing low levels of availability and the positive trend in rents, place the metropolitan logistics market of Valencia in one of the healthiest periods in the historical series.”
With this situation, the French financial entity considers that in our country, logistics assets will continue as one of the most interesting real estate segments for investors this year, despite the fact that the sector expects a moderation in activity, mainly in the first half of the first half of the year. . However, due to the socioeconomic context, there will be a change in trend among the assets to be developed. “From this 2023, it will be the turnkey projects, and in general the platforms configured to measure for a specific operator, which will have the greatest investor interest given the conditions of the real estate market, marked by an increase in costs and risks that , in turn, generates upward pressure on rents”.
This is reflected in a report published by the real estate consultancy Proequity where it is concluded that those warehouses built at risk in 2022 with a delivery date scheduled for this year will continue to be marketed, but the development of new projects will lose considerable weight as of the next months. In this sense, they point to turnkey projects, that is, platforms/ships whose facilities and technologies are customized for a specific operator, as one of the preferred formats for this type of operation. The general director of Proequity, David Martínez, considers that this is due, in large part, to the costs that this type of operation entails, in addition to the risk that they entail. “This scenario, added to the current situation of rising rates, increased construction costs, translates into a drop in speculative ships,” says Martínez.
For this year, real estate consultants forecast a 20% increase in the portfolio of e-commerce logistics real estate assets and this will translate into greater storage area and a high absorption capacity for merchandise distribution. In the words of the vice president and regional director of Prologis Spain, Cristian Oller, the sector will continue to grow. “In recent years, we have seen how electronic commerce has grown exponentially and despite the fact that, according to forecasts, the trend will be to stabilize in a constant line and with more moderate growth globally, it will remain solid” .
Of course, the sector makes it clear to the institutions what may be the bottleneck it faces in the coming years and throws down the gauntlet: more available land will be needed. For this reason, according to David Martínez, “in order to ensure that the sector can cope with the preferences of demand and manage to continue attracting investor interest, it is important to prioritize the creation of land”.
