Prologis, the global leader in logistics real estate, last week announced third quarter 2018 operating and development results for its business in Europe.
Prologis Europe ended the third quarter with continued healthy demand, positive customer sentiment and occupancy of 98 percent. During the quarter, the company signed 372,000 square metres of new leases and 302,000 square metres of lease renewals.
At quarter-end, the company owned or had investments in, on a wholly owned basis or through its co-investment ventures, properties and development projects totalling 16.9 million square metres in Europe.
“Markets in Europe are continuing to expand, and our customers want to invest more in their supply chain efficiencies and thus are proactively looking for right space to accommodate this,” said Ben Bannatyne, president, Prologis Europe. “Limited availability in key areas has created more competition for prime locations, which in turn has had a structural impact on rent growth. Notably, in tighter markets, immediate demand has increased as customers are eager to sign at current rates.“
The strongest operating and development markets in the third quarter were:
- United Kingdom
- Germany, the Netherlands and Sweden in Northern Europe
- Spain and Italy in Southern Europe
- The Czech Republic, Hungary and Slovakia in Central and Eastern Europe
Notable new leases in the third quarter included:
- 34,613 square metres at Prologis Park Pineham, UK
- 29,780 square metres for ITM Logistique at Moissy, France
- 25,708 square metres for GIFI Diffusion at Prologis Park Clesud, France
- 16,391 square metres for Agata S.A at Prologis Park Piotrków, Poland
Development remained disciplined in the third quarter, said Bannatyne. Speculative activity focused on key locations with limited risk of oversupply. Meanwhile, build-to-suit development was robust, buoyed by e-commerce and ultimately accounting for 30 percent of total development starts.
Further, ten new developments occurred in the Czech Republic, Germany, Hungary, Italy, the Netherlands, Poland and Spain totalling 181,089 square metres—of those, 6.7 percent were build-to-suit and 93.3 percent were speculative, with 28.1 percent pre-leased.
Development starts included:
- 38,617 square metre speculative build (70.9 percent leased) at Prague-Airport, Czech Republic-
- 26,371 square metre speculative build at Pulheim, Germany
- 24,692 square metre speculative build at Hannover Airport, Germany
- 5,150 square metre build-to-suit for a major courier company at Stezzano, Italy
Acquisitions and Dispositions
In the third quarter, Prologis acquired an 8,535 square metre building at Sant Boi in the Czech Republic and three land plots in Italy, Spain and Sweden with a net rentable area of 125,277 square metres.
Dispositions in the quarter included two land parcels with a net rentable area of 34,033 square metres in Slovakia and the United Kingdom.
Prologis leases second building to Martinspeed
Prologis has also sealed an agreement to lease a second distribution unit at Prologis Dawley Road, Hayes, to Martinspeed.
The specialist arts handling company already occupies a 13,575sq.ft unit on the logistics park and signed a ten year lease for a 24,794sq.ft unit in a deal which took only two weeks to complete.
“We needed to work with a company who could accommodate our need for additional space within a tight timeframe,” said Simon Sheffield, Executive Chairman of Martinspeed. “The team at Prologis took the time to understand our needs and were able to agree the lease terms and complete the deal in under two weeks, enabling us to quickly move forward with our business plans.”
West London is a great choice for last mile and urban logistics and Prologis Dawley Road is home to a growing and thriving business community. Its proximity to the new Crossrail station at Hayes and Harlington makes it easy for employees to get to and from work and, with the regeneration of the old Vinyl factory well underway, the area is an inviting and attractive place for businesses, their employees and customers.
“Prologis Dawley Road will provide Martinspeed with an excellent base for business growth and we were delighted to help them secure a second unit on the Park,” said Tom Price, Associate Market Officer for Prologis UK. “The Park’s proximity to London and the fact that it was already fitted-out with LED lighting made it an attractive proposition for Martinspeed given the tight timeframe involved.”
Prologis Dawley Road is in an established industrial area close to Heathrow Airport and the West London market. The development has easy access to Junction 3 and Junction 4 of the M4, Junction 15 of the M25 and Junction 1A of the M40.
This latest deal leaves just one unit of 45,719sq.ft available for immediate occupation.