LOGISTICS - RESEARCH - SPAIN - Knight Frank
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RESEARCH
LOGISTICS
SPAIN
2017
ECONOMIC BACKDROP E-COMMERCE NEW FACILITIES OCCUPIER MARKET AND INVESTMENT
LOGISTICS SPAIN, 2017 RESEARCH
ECONOMIC BACKDROP THE E-COMMERCE
Exports have played a key role in the Spanish economic recovery, making
the logistics sector crucial to ensuring the competitivity of the country’s
REVOLUTION
products overseas.
The Spanish economy grew 3.1% y-o-y in According to figures published by the in the availability of goods at the agreed
GRAPH 4
Q3 2017, and according to the IMF, it is set CNMC (the National Commission of Mar- time and place. With the rise of e-com-
LOGISTICS AND ECONOMIC COMPETITIVITY e-commerce turnover
to grow at a similar rate for the remainder of kets and Competition), the turnover gener- merce, logistics has turned from a mere Spain. Millions (€)
the year with the current growth cycle tak- ated by e-commerce sales made via virtual operational element, into an element that
Transport and logistics are of growing and reinforcing companies’ need to be POS devices in Spain rose by almost 25% adds value to products depending on their
ing hold across 75% of the world’s econ-
strategic importance in the economy, one step ahead of the rest, supporting y-o-y in Q1 2017. At year-end this increase availability. 35,000
omy, and with the markets which Spain
not just because they are key for sec- the innovation of both products and is expected to stand around the 20% mark Although retailers are aware of the grow-
trades with the most experiencing sharp 30,000
tors such as Industry and Commerce, processes. versus 2016. ing importance of the last link in the chain,
growth (namely the rest of Europe, the USA
but also because they are vital in they are increasingly opting to manage 25,000
and China), this only further strengthens The logistics sector is already taking The increased security and privacy of on-
terms of the economy’s competitivity the distribution of their products them-
Spain’s economic recovery. line purchases, expansion to other mar-
in general. the measures required to move in line 20,000
kets, improved delivery times and cheaper selves. According to the E-Commerce &
with sustainability principles that allow Digital Transformation Observatory, in
Against this current backdrop of growth, transport costs are some of the reasons 15,000
Increasing automisation and digitalisa- it to continue growing within the con-
the Consumer Confidence Index in Spain behind the rise of e-commerce in Spain. 2017, 14% of e-commerce retailers said
tion is both revolutionising production
text of the Fourth Industrial Revolution, that they would prefer to manage their 10,000
stood at 103.2 points in September, up processes and optimising logistics.
driven by innovation such as robots, Major brands are investing in the om- product logistics themselves, compared
12 points y-o-y. The improved economic
Prices are becoming more competitive drones and artificial intelligence. ni-channel approach, which helps them to to 7% in 2016.
5,000
outlook has boosted household consumer boost sales thanks to the synergies that
spending, taking it 4.6% higher in the Q2 The thriving e-commerce industry and the 0
are generated between the on and offline
need to cut delivery times makes the lo-
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2017 y-o-y comparison. For the remainder buying experience.
GRAPH 2 cation and/or size of logistics facilities ev-
of the year, both internal consumption and
Competitivity factors. Spain and Germany* For the customer, the purchase ends as ermore important, causing them to move
external demand are expected to bolster Source: ONTSI | CNMC | latest available data to Q1
2016-2017 soon as they receive the goods that they closer to cities or locations with very good 2017. Rest of data for 2017 based on Knight Frank
economic growth despite the appreciation
have bought. Logistics plays a key role transport links. forecasts.
of the euro and the weakening effect of low
oil prices. * Each area is scored 1 to 7, with 7 being the highest score.
GRAPH 3 GRAPH 5
European retail e-commerce sales (%)* e-commerce trends
2015-2017 (forecast close) Main factors underpinning e-commerce
GRAPH 1 INSTITUTIONS
Spain’s trade balance. 7
Import and export of goods INNOVATION 6 INFRASTRUCTURE
1994-2016. Millions (€) SOCIAL MEDIA
5 UNITED KINGDOM
Enables people to consult the
4 GERMANY opinions of other consumers
BUSINESS MACROECONOMIC
SOPHISTICATION 3 ENVIRONMENT
and find out information about
FRANCE
2 the brands and promotions.
300,000
SWEDEN
1
MOBILE COMMERCE
200,000 HEALTH AND THE NETHERLANDS
MARKET SIZE
0 Provides speed, flexibility, ease
PRIMARY
EDUCATION EUROPE (AVERAGE) of use and mobility.
100,000
SWITZERLAND
PAYMENT TERMS
0 AUSTRIA AND FINTECH
TECHNOLOGICAL HIGHER EDUCATION
1994
1996
1998
2000
2002
2004
2006
2008
2010
2012
2014
2016
Provides access to services
READINESS AND TRAINING BELGIUM
(cutting out the middle man),
2017
SPAIN transparency, security, speed.
GOODS AND SERVICES - FINANCIAL MARKET 2016
BALANCE TREND GOODS MARKET POLAND
(EXPORTS)
EFFICIENCY 2015 CLICK & COLLECT
EFFICIENCY
GOODS - EXPORTS Offers immediacy, security,
LABOR MARKET ITALY
TREND
EFFICIENCY
ease of use, as well as saving
GOODS - IMPORTS (IMPORTS)
0 5 10 15 20 time and costs.
Source: Bank of Spain Source: World Economic Forum SPAIN GERMANY Source: Centre for Retail Research. * Excluding vacation, autos, gas & tickets. Source: Knight Frank Research
2 3
@ e-commerce
WHAT DOES IT MEAN FOR
THE LOGISTICS SECTOR?
e-commerce has presented the logistics sector
with a great challenge: updating and improving
how it is perceived and its competitivity versus
other markets.
THE CUSTOMER
CAN TRACK
THE STATUS
LOGISTICS SPAIN, 2017 RESEARCH
MULTI-CHANNEL LOGISTICS WITH
MORE COLLECTION OPTIONS,
IN STORE, AT CONVENIENT PICK-
UP POINTS, IN STATIONS AND
AIRPORTS, ETC.
VERY SHORT DELIVERY TIMES,
EVEN IN LESS THAN TWO HOURS.
CUSTOMERS NO LONGER WANT
SPEED, THEY WANT IMMEDIACY.
OF THEIR ORDER
IN REAL TIME.
INCIDENTS ARE
REDUCED THANKS TO
IMPROVED CONTROL
OF ORDERS.
BROADER INTERNA- THE MAIN OBJECTIVE:
TIONAL REACH, DELIVER SATISFACTION
CAPACITY TO SELL
TO MORE COUNTRIES.
MAKE INVERSE LOGISTICS EASIER, BOTH IN TERMS OF
INTEGRATION OF
THE ENVIRONMENT AND RETURNING PURCHASED GOODS.
MORE PAYMENT
SYSTEMS, GREATER
TRANSPARENCY
AND SECURITY. PROFESSIONALISATION OF THE SECTOR, COMBINING
THE LATEST ADVANCES WITH QUALIFIED STAFF.
4 5
LOGISTICS SPAIN, 2017 RESEARCH
NEW LOGISTICS
WHAT MAKES NEW
FACILITIES DIFFERENT? FACILITIES
E-commerce has not only driven take-up of solely focused on storing and distributing
logistics space, but it is also changing the stock, nor are they all located on plots of
actual space inside the facilities. Companies land far from the city centre due to price
are aware that they must redesign their logis- differences or availability of space. If com-
STRATEGIC LOCATION tics warehouses in order to adapt to the new panies want to be competitive in the current
Spaces located very close to cit- business model. Warehouses are no longer climate, they have to change their priorities.
ies, or with good transport links,
in order to reduce delivery times
as much as possible. GRAPH 6
Technology in new logistics facilities
Latest advances in operations
AUGMENTED REALITY
Workers wear smart goggles that indi-
TECHNOLOGY
cate where the product can be most effi-
New technical facilities and systems ciently stored.
that help to automate processes,
allowing for faster deliveries, track-
ROBOTICS
ing and statistics for products,
Robot helpers can carry out repetitive tasks
greater control over orders, and
or tasks that require the most physical work.
minimising work-related accidents,
among other advantages.
ITEM ENCODING
(THE INTERNET OF THINGS)
Systems that can identify the exact amount
of every product in stock, where it can be
found, and how popular it is, in order to con-
trol production amongst other things.
MORE DEMANDING DESIGN
More efficient, sustainable and
BIG DATA
profitable industrial facilities. Use
of specific materials and new re- Constantly collating data creates huge pos-
sibilities in the field of Big Data, where know-
furbishment/construction methods
ing consumer behaviour with relation to en-
that provide greater security and
coded items is crucial in order to optimise
ease of maintenance are crucial. resources during manufacturing, and also to
It is important to analyse the core detect new business models.
purpose of the building, as this is
not the same for every occupier.
DRONES
Allows delivery to locations that are diffi-
cult to access. They can reach the highest
shelves in the warehouse, confirming the
m²
amount of stock and space available.
AREA 3D PRINTING
There is demand for more space
Creation of objects, such as replacement
than in previous years, however this parts, at any time and place, saving on stor-
space is also used more efficiently. age and transport costs.
6 7
AMAZON. Logistics Centre
LOGISTICS
San Fernando de SPAIN,
Henares, Madrid 2017 RESEARCH
Dispatches thousands of orders across southern Europe every day,
and can deliver to Barcelona in a matter of hours.
Distance from the centre of Barcelona: 11 km.
Size: 66,000 sqm on a 210,000 sqm plot.
Unique feature: 3,500 robots will automatically organise 30,000
shelves. The robots will be able to move 750 kg at a speed of 1.7
metres per second.
Other features: Amazon manufactures its own logistics robots,
thanks to the creation of its “Amazon Robotics” business line, fol-
lowing the acquisition of the company Kiva Systems in 2012.
Value-add of the brand: technology.
AMAZON. El Prat Logistics
Dispatches thousands of orders across Europe every Centre, Barcelona
day, and can deliver to Madrid in a matter of hours.
WHAT IS AT THE HEART OF THE
Distance from the centre of Madrid: 21 km.
Size: 77,000 sqm.
Unique feature: with the “Same Day Delivery Ser-
MOST GROUNDBREAKING
vice”, any purchases made before 2.15 pm can
be delivered the very same day. With the Random
Stow system, collecting products which are stored
in a random order instead of by product type is
LOGISTICS COMPANIES?
quicker and more efficient.
Other features: once a month it opens its doors
welcoming anyone who wants to visit the centre
and receive a personal guided tour. Value-add of
the brand: personal touch and transparency.
Companies that are committed to investing in innovation, sustainability,
and the efficiency and security of production processes are already
reflecting the value-add of their brands in their logistics facilities.
MERCADONA. Ciempozuelos Logistics Centre, Madrid Flagship logistics unit; one of the most
modern in the world.
AMAZON | MADRID AND BARCELONA Distance from the centre of Madrid:
35 km.
San Fernando de Henares Logistics Centre, Madrid Size: 100,000 sqm on a 200,000 sqm plot.
Unique feature: automated processes
El Prat Logistics Centre, Barcelona allow all the stores in the city centre to
be stocked within a short space of time.
Technology removes all unnecessary
work for employees, whilst also reducing
the risk for work-related accidents.
MERCADONA | MADRID Other aspects: nursery services for em-
ployees’ children. Mercadona’s current
Ciempozuelos Logistics Centre, Madrid strategic plan for digital transformation
optimises all the processes, particular-
ly logistics processes. Value-add of the
brand: commitment to employees. In-
depth understanding of what their cus-
tomers want.
8 9
LOGISTICS SPAIN, 2017 RESEARCH
THE DIGITAL GIANT
Amazon Case Study
The creation of Amazon marked a before In fact, they are already launching their own
GRAPH 8
and after for the logistics sector. The dig- clothing lines. Another of its strengths is
Amazon initiatives that change the way orders are made AMAZON PANTRY
ital giant has enjoyed exponential sales making delivery points more flexible, like its and received System designed for Amazon Prime customers,
growth, without the need for brick-and- smart lockers, packages delivered into the
allowing them to do their everyday shopping by
mortar stores. Quite the opposite in fact; boot of your car using a key-storing com- filling up a virtual basket. Each product takes up
from the very outset, its name has been partment, or a smart doorbell that would its real size and weight in the virtual basket.
synonymous with the online market. As
allow delivery drivers to enter your home
its sales have grown, it has also needed AMAZON PRIME NOW
and deliver the package without the need
more physical space to receive, store and Ultra-express delivery service (1-2 hours), ex-
for the customer to be at home.
dispatch the enormous range of products clusively for Prime customers. This initiative
that it stocks. The company’s acquisition of opens the door to fresh produce delivery, as a
The value of the company’s brand has
AMAZON
logistics space therefore grows in tandem reduction in delivery times means that produce
PRIME NOW
with its sales rates. grown almost every year, and has stood can be kept cold, and food can be delivered in
at over $50,000 million since 2014. Speed, perfect condition. Amazon has collaborated
along with the confidence that the brand AMAZON with the Mercado de la Paz in Madrid, making
Amazon’s strategy involves taking full
instils in consumers, is one of the main
PANTRY it the first market in the world to deliver its pro-
control of the products that it sells, and duce via this service, combining the traditional
not just during the distribution phase. It advantages that Amazon has over compa- market shopping experience with the speed
can predict trends using information that nies such as AliExpress, that have longer offered by Amazon’s technology. This service
it collects about consumer preferences delivery times, and that can be delayed by is available for deliveries to Madrid, Barcelona
and neighbouring cities.
during distribution. border checks. AMAZON
GO
AMAZON DASH BUTTON
GRAPH 7 This system allows products to be ordered auto-
Value of the Amazon brand matically at the push of a button, a button which
AMAZON’S LOGISTICS INFRASTRUCTURE
Billions of USD is basically a device connected to the internet
and to the user’s Amazon account. According
Its large network of logistics facilities across Spain al- to Amazon, some companies in the USA receive
lows it to keep delivery times to a minimum. It boasts half of their orders via this system.
314,800 sqm of logistics space, across 11 units.
120
PRIME WARDROBE
AMAZON
Amazon has chosen Madrid as the headquarters of its Amazon will allow customers to try on clothing
98.9 DASH at home before deciding whether or not to pur-
technology centre for southern Europe, serving Ama- 100
zon Business, which is a marketplace for companies.
BUTTON chase the item, giving them the option to return
It will also be used to develop features and services any items they decide not to buy. This service is
aimed at the customers for the five marketplaces that 80 not available in Spain.
it has across Europe. PRIME
64.3 WARDROBE AMAZON GO
60 A checkout-free supermarket. The idea is that
It provides the transport companies that it contracts
codes and sensors track the goods selected as
with software that contains daily traffic patterns and
other information that helps to optimise delivery times customers do their shopping, with the customer’s
40
on different routes. 37.6 PRIME account being charged automatically at the end,
AIR and therefore avoiding ever having to queue or go
through a checkout.
20
It is redesigning its warehouses so that technology can
be used more efficiently. PRIME AIR
0
An Amazon project that uses drones to deliver
packages. The first ever delivery (pilot project)
Robots are being introduced into warehouses to re-
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
was dispatched to a customer in the United King-
duce the time between purchase and delivery from
60-75 minutes to 15 minutes. dom, and arrived just 13 minutes after purchase.
Source: Statista Source: Knight Frank Research
10 11
LOGISTICS SPAIN,
LOGISTICS SPAIN, 2017
2017 RESEARCH
MADRID
MARKET A1
SUBMARKETS
BUITRAGO DE
LOZOYA
The industrial and logistics areas of Madrid are divided into
three main rings, according to their distance from the city centre:
FIRST RING A2
GUADALIX DE LA
A6 SIERRA
The area closest to Madrid city centre, within a 15 km
8
radius. This area includes Coslada logistics park, in the
Corredor de Henares. EL MOLAR
7
Main towns:
COLLADO COLMENAR VIEJO 6
1 Madrid 5 Leganés VILLALBA 2 MARCHAMALO
5
2 Coslada 6 Getafe 3
TRES CANTOS GUADALAJARA
3 San Fernando 7 Rivas-Vaciamadrid 1
de Henares 8 Alcobendas 3
SAN SEBASTIÁN 2 4
4 Barajas 9 Velilla de S. Antonio DE LOS REYES 7
1
ALCOBENDAS 4
LAS ROZAS
SECOND RING 8
ALCALÁ
VILLANUEVA DE 6
Comprises the area within a radius of between 15 and LA CAÑADA 4 DE HENARES
42 km from Madrid.
MADRID 5
BOADILLA DEL
NAVAS DEL REY
BRUNETE
MONTE
2 3
Main towns: 1
9 8
1 Camarma 7 Meco
5 7
ALCORCÓN MÉNTRIDA
2 San Agustín de Guadalix 8 Loeches
LEGANÉS RIVAS-
MÓSTOLES
3 Algete 9 Pinto 6 VACIAMADRID ARGANDA
FUENLABRADA DEL REY
4 Daganzo 10 Valdemoro GETAFE
5 Torrejón de Ardoz 11 Fuenlabrada MÉNTRIDA
11
PARLA
9 PINTO
6 Alcalá de Henares 12 Ciempozuelos
CASARRUBIOS
DEL MONTE 10 VALDEMORO
VILLAREJO DE
THIRD RING 12 CIEMPOZUELOS SALVANÉS
The outermost area. Includes logistics facilities that are ILLESCAS
more than 42 km from the centre of Madrid. It contains
logistics parks on Madrid’s border with the provinces of 14 10 ARANJUEZ
Guadalajara and Toledo. 9
A5 11 12
Main towns:
13
1 Quer 8 Yunquera
TOLEDO A3
2 Alovera 9 Tarancón
3 Cabanillas del Campo 10 Seseña 15
4 Chiloeches 11 Borox
5 Guadalajara - 12 Aranjuez
Marchamalo 13 Ontígola
6 Torija 14 Illescas
7 Fontanar 15 Toledo
A4
12 13
LOGISTICS SPAIN, 2017 RESEARCH
VACANCY AND TAKE-UP
FUTURE SUPPLY
The logistics vacancy rate in Madrid cur- although most of these developments are houses here, on a plot that they recently Logistics take-up in the first three quarters
GRAPH 12
rently stands at 4.75%. However, a signif- likely to be pre-let prior to their completion. acquired for €35 million, where they have al- of 2017 totalled more than 675,000 sqm,
Take-up, Madrid (‘000 sqm)
icant percentage of this vacant space is The remaining space will be owner-occupied. ready started the first speculative phase, due higher than total take-up in previous years, 2009-Q3 2017
highly uncompetitive and outdated product. for completion at the end of this year. Two with the year end figure expected to reach
Among the turn-key developments, we
other noteworthy projects are the 90,000 sqm close to 800,000 sqm.
The lack of logistics supply that meets the would highlight the more than 100,000 sqm 676
Prologis development, and Axiare’s logistics
needs of today’s operators is prompting the P3 Logistic Parks project in Illescas, the Take-up has been boosted by a surge in
park, which will comprise over 130,000 sqm,
development of new projects. More than 70,000 sqm being developed by Merlin in the number of lettings, especially for larger
including two warehouses that the SOCIMI
Azuqueca de Henares, and the 50,000 sqm
50,000 sqm of logistics supply is expected (REIT) is developing for Transaher. properties, with a total of seven leases 440 450
that Inversiones Montepino are developing 410
to come onto the Madrid market in Q4 2017. being signed for properties over 40,000 360 370 375 385
for Luis Simões in Cabanillas. The larg- We would further highlight the Puerta Centro
sqm so far in 2017. 290
Over 650,000 sqm of new logistics space is est speculative projects in the pipeline for Ciudad del Transporte project that will com-
in the pipeline for 2018. Almost 330,000 sqm next year include the close to 54,000 sqm prise 200 Ha between Guadalajara and Mar- In terms of location, the first and third rings
of this will be turn-key projects, and circa Mountpark project at Plataforma Central chamalo, that will bring more logistics space account for the largest share of take-up,
300,000 sqm will be speculative projects, Iberum, as well as the “Puerta de Madrid” onto the Madrid market in the coming years. with prospective tenants increasingly opt-
project, comprising two properties in San ing for third ring properties so far this year.
Fernando de Henares, which was commis- 2009 2010 2011 2012 2013 2014 2015 2016 Q3 2017
GRAPH 9 Puerta Centro The developments in Illescas and Caba-
sioned by GreenOak, and will offer a total
Vacancy rate Ciudad del Transporte project, nillas del Campo have driven take-up in Source: Knight Frank Research
Madrid Market. Q3 2017. logistics area of 38,000 sqm.
Guadalajara third ring to almost 40%. The slightly lower
For 2019, we would highlight the more than rents in this area favour take-up of larger In second ring, Leroy Merlin signed close to
GRAPH 13
100,000 sqm being developed by Inver- spaces, whilst smaller spaces are let in first 60,000 sqm in Meco.
Take-up by ring, Madrid. Q1-Q3 2017.
siones Montepino for XPO in Marchamalo’s ring to solve the last-mile problem. Lastly, in third ring, DSV now manages
Ciudad del Transporte. Goodman also has
In first ring, there were two more lettings 50,000 sqm in the new logistics park devel-
the potential to build more than 75,000 sqm RING 1
in San Fernando de Henares. One of these oped in the Si-20 industrial estate owned by
in La Dehesa Logistics Centre in Alcalá de
4.75% Henares, where it will develop upwards of was the Axiare development for Transa- Merlin, on the Corredor de Henares, where RING 2
22,000 sqm of turn-key projects. her, including a logistics warehouse and a it has storage capacity for up to 65,000 pal- RING 3
cross-docking property, comprising 42,000 lets. XPO occupies 48,000 sqm in the same
In the Madrid area, San Fernando de
sqm, with Grade A specifications and LEED park, where Logista and Luis Simões can
Henares is due to see the most logistics Source:
Gold certification. also be found. Knight Frank Research
development over the next two years. VGP
Source: Knight Frank Research will develop 140,000 sqm of logistics ware-
GRAPH 14
GRAPH 10 GRAPH 11 Main lettings in Madrid
Q1-Q3 2017
Future developments by phase Future developments by type
Madrid Market Madrid Market
OCCUPIER TOWN PROVINCE RING AREA (SQM)
700,000 700,000
CONFIDENTIAL Illescas Toledo 3 103,000
600,000 600,000
LEROY MERLIN Meco Madrid 2 59,814
500,000 500,000
AMAZON Getafe Madrid 1 58,215
400,000 400,000
CONFIDENTIAL San Fernando de Henares Madrid 1 56,937
300,000 300,000
DSV Cabanillas del Campo Guadalajara 3 49,800
200,000 200,000
XPO Cabanillas del Campo Guadalajara 3 47,934
100,000 100,000
TRANSAHER San Fernando de Henares Madrid 1 42,000
0 0
2017 2018 2019 2017 2018 2019 GRUPO MIQUEL Torrejón de Ardoz Madrid 2 20,880
UNDER PLANNING PLANNED SPECULATIVE TURN-KEY OWNER OCCUPIED JAGUAR LAND ROVER Cabanillas del Campo Guadalajara 3 15,074
CONSTRUCTION PERMISSION
GRANTED
Source: Knight Frank Research Source: Knight Frank Research Source: Knight Frank Research
14 15
LOGISTICS SPAIN, 2017 RESEARCH
RENTS INVESTMENT
Logistics rents in Madrid are gradu- During the first nine months of the year, lo-
GRAPH 15 GRAPH 16
ally trending upwards, and the gap gistics investment in Spain exceeded €550
Variation in prime* rents, Madrid Investment volume in Spain
between rents in first and third ring is €/sqm/month. 2007-Q3 2017 2009-Q3 2017 million, with the year end total expected
closing. This is due to a large number to reach €1.2 billion. The deal of the year
of new, high quality projects in third MIN. MAX. was sovereign wealth fund Singapur GIC’s
6.75
ring, that meet the needs of today’s REST OF SPAIN
purchase via P3 Logistic Parks of the Gree-
RING 1 €4.25 €5.25 968
occupiers, and that have a narrower 6.25 MADRID MARKET
RING 2 €3.50 €4.75 nOak portfolio for €243 million.
negotiating margin. 6.00 6.00
RING 3 €2.60 €3.60 BARCELONA MARKET
5.60 637 GreenOak’s purchase of the Goodman
The prime rent in Madrid currently 5.50
578 556 portfolio, comprising 4 properties in Quer,
stands at €5.25 per sqm. Growing 5.25
5.00 Daganzo and Valdemoro for €45 million is
demand and the enhanced quality of 4.80
4.75
new logistics facilities will drive up
4.70 the second largest deal so far this year.
176
rents over the next few years, with an 112 89 The need for companies to find logistics
82 81
average annual growth of 3% forecast
platforms closer to the end consumer
in Madrid. 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Q3
2017
2009 2010 2011 2012 2013 2014 2015 2016 Q1-Q3 means that other markets, such as Valen-
2017
Source: Knight Frank Research. *Excludes non-relevant deals. Source: Knight Frank Research cia and Seville, are starting to move onto
international investors’ radar. In fact, the
largest deal in Q3 2017 was real estate
GRAPH 17
LOGISTICS MARKETS fund manager TH Real Estate’s acquisi-
Variation in prime yields
IN EUROPE 2009-Q3 2017 tion of the Carrefour logistics platform in
HELSINKI Ribarroja, Valencia.
8.50%
10.00 8.00% 8.25% Investor appetite is putting upward pres-
7.75%
5.75% sure on prices, and whilst rental increases
7.25%
8.00% 8.00% 8.00% 7.00% remain moderate, yields continue to tighten.
DUBLIN MOSCOW
6.25% A Knight Frank investor survey completed
Prime rent (€/sqm/month)
8.15 5.65 5.75% at its European Breakfast event found that
MADRID MARKET BARCELONA MARKET
5.25% 51% of investors selected industrial and lo-
AMSTERDAM 11%
Prime yields LONDON BERLIN gistics as their preferred asset class for in-
2009 2010 2011 2012 2013 2014 2015 2016 Q3
7.10 2017 vesting in over the next 3 to 5 years, hence
15.25 BRUSSELS 5.75 WARSAW
Source: Knight Frank Research
5.00% 5.00 the sector is expected to continue to flour-
4.25% 4.60 4.75%
ish over the next few years.
PARIS PRAGUE 6.75% GRAPH 18
5.50% FRANKFURT 4.85
4.85 Main investment deals in Spain
6.65 MUNICH 6.00% Q1-Q3 2017
5.00% 4.75% 7.10
GENEVA
BUDAPEST BUYER SELLER LOCATION PRICE (€M)
14.55 MILAN
4.75%
3.75 P3 LOGISTIC PARKS GREENOAK Various 243.35
5.50% 4.15 7.75% BUCHAREST GREENOAK GOODMAN Quer, Daganzo and Valdemoro 45.00
BARCELONA 7.00% 4.00 TH REAL ESTATE CONFIDENTIAL Ribarroja (Valencia) 38.50
LISBON MADRID
5.25 6.85 8.50% AXIARE GRUPO BARRAL San Fernando de Henares 38.00
3.75 BARINGS GLL Ontígola 37.56
5.75% 5.75%
6.50% UBS INVESCO Leganés 35.15
GREENOAK BANCO SABADELL Quer 26.33 Carrefour logistics platform
in Ribarroja, Valencia
TH REAL ESTATE GRUPO GALCO Valdemoro 21.50
Source: Knight Frank Research
Data as at Q3 2017 Source: Knight Frank Research
16 17
LOGISTICS SPAIN, 2017 RESEARCH
WELCOME TO THE FUTURE “If there’s one thing
that has shaped the
OF LOGISTICS logistics sector this
year, it has definitely
been the tech
ALEJANDRO GALÁN | Head of Industrial and Logistics, Knight Frank Spain revolution. The new
distribution systems
keep time and costs
With more than 20 years of experience in the Industrial and Logistics to a minimum.”
sector, Alejandro Galán has been the Head of this area at Knight Frank
for over seven years. In this interview, he gives us his take on how the
sector is changing during this time of expansion.
What role do you think e-commerce how is this expected to change in the fu- How has this affected rents? And what bespoke spaces, which is why turn-key de- resent a high percentage. We could say that
has played up until now, and how will it ture? other factors affect rents? mand is so much higher, at approximately the logistics market is currently one of the
change over the next few years? The most common tenants are logis- 75% compared to speculative projects preferred areas for investors.
These new platforms occupy more
It has played a crucial role, as the pri- tics operators. This type of tenant is ex- (25%). Many speculative projects under
space, pushing development prices up.
ority of large companies is now, at least pected to become even more efficient and construction will end up becoming turn-key, What do they look for?
That said, they also optimise space and
in part, to focus on their online strategy. specialised, adapting to the needs of the as they will be pre-let prior to completion.
time, offering greater long-term returns. That depends on the investor, but most
Companies such as Media Markt and Indi- market and making use of new technology of them are looking for prime product in
tex have already chosen their new logistics as it appears. What type of investors are interested in Madrid and Barcelona, or other markets
platforms, where they can efficiently stock In terms of projects, what would be the the Spanish logistics market? such as Zaragoza and Valencia, with an
all of their products sold via their online optimal speculative-turn-key ratio in the estimated value of at least €20 million. An-
What sort of limitations do they face? All of the institutional funds, not just the
channels. Meanwhile, Amazon’s business current market climate? traditional ones, but also new funds, are other important factor for investors is the
Above all, the lack of a product that
model has been so successful that new The majority of operators want to create very interested. SOCIMIs (REITs) also rep- asset’s repositioning potential.
caters to their exact needs. The range of
operators are expected to launch a similar
services offered by logistics occupiers is
model on the Spanish market over the next How is logistics investment expected to
enormous, and each one requires its own
few years. perform next year?
specific needs.
The lack of product is one of the main
Which areas of the Madrid market are limitations, and so we expect a greater rota-
What are the strengths of the logistics
currently the most attractive to compa- tion of existing properties and tighter yields.
platforms in the Madrid market?
nies?
Their good transport links with the rest Could you give an example of a standout
In the Madrid province, the most
of Spain are without doubt one of their
sought-after areas remain the Corredor deal during the past year, and why do you
main strengths. Madrid also boasts strong
del Henares, particularly San Fernando de think it was significant?
performance figures: it holds the top spot
Henares and Getafe, to the south of the In recent months, we have seen a num-
for consumption in Spain, and also for
province. In neighbouring areas, Illescas in ber of deals that reflect the healthy inves-
the number of production centres. One of
The logistics market has broken all exist- Toledo, and Cabanillas in Guadalajara. tor appetite for the sector. One example is
Spain’s weaknesses is its railway network,
ing take-up records this year, what fac- which does not work as well in terms of UBS’s acquisition of two logistics proper-
tor do you think has impacted logistics What do companies look for when select- freight transport as it does in other Euro- ties from Invesco for €35 million in Leganés.
growth the most over the last year? ing a given location? pean countries. In terms of corporate transactions, I would
A location with good transport links, highlight China Investment’s purchase of
If there’s one thing that has shaped the
that is also not considered a handicap Logicor for over €12 billion, the second
logistics sector this year, it has definitely How has the sector changed with the new
in terms of hiring personnel, is a must. largest real estate deal of all time.
cross-docking platforms?
been the tech revolution. With e-commerce Companies also look for an area with a
It has optimised distribution systems,
generating more than €24 billion in Spain good range of services and sustainable
keeping times and storage costs to a min-
during 2016, and expected to generate buildings.
imum. This is a sector where efficiency is
even more in 2017, this has undoubtedly key, both in terms of costs and time, and
been a major contributing factor in the lo- What are the most common types of ten- the latest technology means that these can Logistics properties recently acquired by UBS in Leganés EDITING AND WRITING:
gistics sector’s exponential growth. ants in the Madrid logistics market, and be reduced year after year. KNIGHT FRANK RESEARCH
18 19COMMERCIAL BRIEFING
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LOGISTICS RESEARCH
Alejandro Galán
Head of Industrial and Logistics
+34 600 919 069
Alejandro.Galan@es.knightfrank.com
James Cowper-Coles
Capital Markets Consultant
+34 600 919 105
James.Cowper-Coles@es.knightfrank.com
Rosa Uriol
Head of Research
+34 600 919 114
Rosa.Uriol@es.knightfrank.com
Tamara de la Mata
Research Consultant
+34 600 919 126
Tamara.delaMata@es.knightfrank.com
Knight Frank Research offers strategic advisory services, consultancy services and forecasts
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RECENT REPORTS
RESEARCH
NEWS
LOGISTICS SNAPSHOT 3rd QUARTER 2017
OCCUPIER MARKET GRAPH 1 GRAPH 2
E-COMMERCE AND LOGISTICS –
E-commerce turnover Variation in prime rents THE MISSING LINKS
MADRID AND Spain €/sqm/month
BARCELONA 35.000
35,000
10,00
10.00
Madrid
8.75
9,00
9.00 Barcelona ISSUE 6
30.000
▪ E-commerce growth has been a key 30,000
8,00
8.00
factor in the increase of logistics take-up, 25.000
25,000 7,00
7.00 6.75
as well as new development projects.
6,00
6.00
20.000
20,000 6.50
Millions
▪ Logistics take-up in Madrid recorded 5,00
5.00 5.25
15.000
15,000
676,000 sqm at the end of the third 4,00
4.00
quarter, surpassing the total take-up in 3,00
3.00
10.000
10,000
previous years. 2,00
2.00
5,000
5.000
1,00
1.00
Q1
▪ Prime rents in Madrid continue to rise
0,00
E-COMMERCE
0 0.00
standing at 5.25 €/sqm/month, while
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
Q3 2017
2014 2015 2016 2017
they remain stable in Barcelona.
Source: CNMC | last available data up to Q1 2017.
Rest of 2017 based on own estimations. Still woefully misunderstood
▪ Amazon´s 100,000 sqm development in
Plataforma Central Iberum has been the
stand out leasing transaction in Q3.
GRAPH 3 GRAPH 4
Take-up levels Take-up levels
R E TA I L +
Madrid. 2009 - Q3 2017 Barcelona. 2009 - Q3 2017
INDUSTRIAL
GRAPH 5
TOP3 | main occupier transactions 800 800
EUROPEAN
Madrid market. Q3 2017 676
700 700 645 Closer bedfellows than ever
600 600 550
AMAZON ILLESCAS | TOLEDO
440 450
500 500
QUARTERLY
440
410 400
385 375
103,000 sqm
Thousands
Thousands
400 360 370 375 400
SHEDS,
290 290 307 315 312
300 300
SHOPS AND
200 200
LEROY MERLIN MECO | MADRID
COMMERCIAL PROPERTY OUTLOOK
SHOPPERS
100 100
60,000 sqm 0 0 Q3 2017
2009
2010
2011
2012
2013
2014
2015
2016
Q3 2017
2009
2010
2011
2012
2013
2014
2015
2016
Q3 2017
The twain needs to meet
CEVA SESEÑA | TOLEDO
VACANCY RATE -A- R E TA I L N E W S
12,000 sqm MADRID: 4.75% BARCELONA: 3.5%
OCCUPIER TRENDS INVESTMENT TRENDS MARKET OUTLOOK
Logistics Snapshot European E-commerce and logistics,
Spain| Q3 2017 Quarterly Q3 2017 the missing links | 2017
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