The JLL Supply Chain Activity Index is expected to rise to 129.0 by the end of the year, signalling further expansion in the logistics market. Take-up of industrial and logistics space in Europe could reach 18 million square meters in 2016, an increase of 5% compared to the previous year. However, uncertainties in the EU economy may pose downside risks. Significant development is underway across Europe, with 10.5 million square meters currently under construction.

1. 8.5million sq m
JLL Supply Chain Activity Index*
expected to rise to 129.0 by year
end, up from 128.0 in Q2 2016 –
signalling further expansion
18 million sq m could be taken-up in
total in 2016, an increase of 5% YoY
according to the Index forecast
but downside risks remain with
uncertainty over the EU economy
expected to remain high in the
coming months
European Industrial & Logistics
Market Fundamentals
Q2 | 2016
UK CEERussia
44% 44% 47%
Western Europe
excl. UK
15%
H1 2016 marks strongest half-year take-up on record …
YoY
5%
… with positive momentum expected to be maintained in H2 2016
on 5yr H1 average
24%
All markets significantly up on their 5-year H1 average
except for France, Hungary, Russia and Spain
% share of speculative development by geography – end Q2 2016
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JLL quarterly Industrial & Logistics analysis illustrates the current market condition and examines how it will evolve in the future.
All figures are in sq m / €, based on logistics units >5,000 sq m and UK>10,000 sq m
www.jll.eu
* JLL’s Supply Chain Activity Index, a composite index of economic and supply chain variables that the EMEA Industrial & Logistics Group
has constructed to forecast short-term corporate demand for logistics (distribution warehouse) space across Europe. Find out more:
http://www.jll.eu/emea/en-gb/research/256/jll-supply-chain-activity-index
QoQ
11%
QoQ
19%
YoY
40%
on 5yr Q2 average
57%
YoY
26%
80% on 5yr average
80%
H1 2016 completion volumes up YoY albeit Q2 marked the
second consecutive quarter of slowing overall new space
added to the market
Strongest growing occupier groups in H1 2016 (YoY)
Take-up 3PL providers / couriers
YoY
13%
10.5million sq m
under construction
Significant increase of development over the quarter pushes total under construction to levels not
seen since 2008. However, developments remain build-to-suit driven, with no significant impact
on vacancy rates expected until the end of the year.
27%
YoY
Take-up e-commerce driven
145%
Strongly growing completion volumes in most of the
smaller markets – slowing QoQ volumes driven by
France and Russia; Germany slightly down
3PLs remain largest occupier group in H1 but continued alignment
to omni-channel distribution models drives retail and e-commerce
led activity
18million sq m129.0
Other
6%
E-commerce
10%
Manufacturing
20%
Third Party Logistics
35%
Retail companies
29%
Top performers YOY
Q2 warehousing rents QoQ
excl. Russia
YoY
excl. Russia
Rental growth marginally slowing further across Europe in Q2 2016 as the majority of markets saw
stable rental environments – albeit some markets saw rents finally moving higher over the quarter:
Amsterdam, Leeds, Lyon, Madrid and Rotterdam all moved up QoQ
Rental growth slowing YoY but outlook remains positive
0.6% 1.6% Dublin
Madrid
Glasgow
For more information, contact:
Alexandra Tornow
EMEA Industrial & Logistics Research
alexandra.tornow@eu.jll.com
Guy Gueirard
Head of EMEA Industrial & Logistics
guy.gueirard@eu.jll.com
Ryan Loftus
EMEA Industrial & Logistics Research
ryan.loftus@eu.jll.com
… with the largest speculative exposure in Russia and CEE; UK remains the strongest market
in Western Europe but speculative development reducing
Speculative development edges up further but still at low levels
of speculative warehousing space
under construction at end of Q2
the highest volume since the
downturn in 2009; reflecting 27%
(22.6% if excluding Russia) of total
under construction
2.7million sq m