Saturday, 15 March 2025
LIP Invest, a provider of special real estate funds in German logistics real estate, has released its latest quarterly market report, “LIP UP TO DATE – Logistikimmobilien Deutschland.” The report provides a comprehensive analysis of the logistics real estate sector for Q4 2024, along with projections for early 2025, covering transaction volumes, space take-up, new construction trends, and market yields.
Market Overview
The German logistics real estate market closed 2024 on a stable note, with transaction volumes aligning with the 10-year average. However, space take-up slightly lagged behind the previous year’s figures.
“The rental market’s future depends on the next German government’s policies. The industry seeks greater stability post-elections to facilitate expansion decisions, particularly for contract logistics firms. We anticipate a catch-up effect in the second half of 2025,” stated Natalie Weber, Head of Fund Management at LIP Invest.
Q4 transaction activity was dominated by international investors and a growing supply of new-build properties. However, some developers postponed their typical end-of-year sale offerings, shifting investment activity into early 2025.
Investment Market
The logistics real estate investment market recorded a total transaction volume of EUR 7.0 billion for 2024, with Q4 contributing EUR 2.7 billion. Large-volume deals and portfolio transactions, such as Branicks’ sale of four properties to EQT Exeter, were key drivers.
Prime yields for new-builds remained stable at 4.80-5.00%. Deals exceeding a 20x price factor were rare. The ECB’s interest rate cuts had minimal impact on the 10-year SWAP rate, with modest yield declines expected in mid-2025 as interest rates adjust.
LIP Invest continues to monitor the German logistics market closely, analyzing supply and investment trends. In Q4 2024, properties worth EUR 0.5 billion were offered to LIP, but overall volume remained low due to postponed transactions by developers.
Space Take-Up and New Construction
The German logistics property market saw total space take-up of 5.1 million square meters in 2024. Despite ongoing economic and geopolitical uncertainties, e-commerce-driven demand picked up toward year-end. Q4 recorded 1.25 million square meters in take-up.
New construction activity reached 1.1 million square meters in Q4, surpassing 2023 levels. A total of 4.05 million square meters of logistics space was built in 2024, reflecting a 5% annual increase. Speculative developments by project developers and owner-occupier expansions, such as Pfenning Group’s 20,000-square-meter logistics center in Ladbergen, contributed to this growth.
Alternative Trade Routes: Panama Canal Competitor?
Efficient trade routes are crucial for global logistics. Nicaragua’s government has revived plans for a 445-kilometer waterway to connect the Pacific and Atlantic Oceans, challenging the Panama Canal’s dominance. With a proposed width of 290 meters and depth of 27 meters—significantly larger than the Panama Canal—this ambitious project aims to enhance global shipping. However, despite a groundbreaking ceremony in 2014, its completion remains uncertain.
LIP’s full market report is available for free download at:
