Market data industrial & logistics space Berlin 2024: rents, locations & trends

Lack of properties restricts market activity

In 2023 industrial and warehouse property tenants and owner-occupiers in Berlin concluded contracts for some 400,000 m² of space. Although this result was not as good as the previous record-breaking year, total take-up was still significantly higher than most industry experts had expected.

With a share of over 60% of annual take-up, the second half of the year was stronger than the first, but there was no year-end rally. Increasing population densities and the boom in online retailing have resulted in a greater need for efficient industrial and logistics properties. Correspondingly, demand for logistics premises has remained stable despite the current economic challenges.

This is particularly true for Berlin and other metropolitan regions located along major European transport axes. The lack of industrial and warehouse space is a major brake on market activity. In combination with increased financing and construction costs, the unwillingness of cities and municipalities to approve applications for logistics premises is making development projects more difficult.

Nevertheless, demand is strong, so speculative development projects are still taking place. Limited availability of space within Berlin’s city limits meant that take-up in 2023 was primarily generated in the hinterland, accounting for some 59% of the total volume. As in previous years, the focus of activity was on the Umland Süd partial market.

Rents are still going up

Companies are responding to the current economic challenges and planning uncertainty by focusing on space, which can be used flexibly. Correspondingly, they are choosing to rent industrial and logistics premises rather than purchase them. In line with this, leasing contracts accounted for almost all the total take-up in and around Berlin in 2023. There is a general trend for shorter leasing contract terms of around three to five years.

Where required, tenants are making use of options to renew contracts. This enables them to continue using the premises and avoid time-consuming searches for suitable alternative properties. The continuing market situation, which is characterized by limited property offerings and high demand, led to a further rise in rents in 2023. There was thus a slight increase in prime and average rents to 8.20 euros/m² respectively 7.20 euros/m². It is expected that prime rents will continue to go up in 2024.

Well-positioned warehousing and distribution centers in particular will retain their ability to adapt effectively to economic changes. Logistics properties play a key role in global supply chains and will remain crisis-proof in the current year. Engel & Völkers Commercial thus forecasts a solid total take-up of between 460,000 and 500,000 m² in 2024.