Diverging logistics activity accelerates across European markets

Logistics activity across European markets continues to diverge with growing differences also across local submarkets becoming more significant.

Freight volumes and road transport activity are the main leading indicators of demand for logistics space and rental growth with 1-1.5 year leading characteristics. Kania’s logistics analytics allows users to track this activity at any location where their assets are (or portfolios of assets) or where they evaluate or execute transactions by providing live nowcasting and trends of logistics activity for specific geolocations.

In order to monitor logistics activity at large scale Kania has developed standardized monitoring geolocations across 35 main European markets/cities covering in total 135 geolocations/submarkets; selection was made based on location of main logistics hubs within each market. This allows us to provide users with the most granular and most current nowcasting of logistics activity and leading indicators of demand at submarket level.

Below charts illustrate this for Paris and Hamburg markets respectively and similar divergence is present across European markets. Diverging activity implies that geolocation specific aspects will continue to drive performance in logistics portfolios and exposures even within a larger markets.

The charts indicate flow of transport vehicles (TVF) across highlighted areas; EPOI is a reference of the specific geolocation (European Point of Interest) and the figures below are transport vehicle flows for the location as of end of November; referenced to 100 = average flow during 2022. For example, the two locations in Paris EPOI016 and EPOI011 (north east) with values of 86 indicate that transport vehicle flows are -14% lower currently than average flows during 2022, i.e. logistics activity in the area has declined in a meaningful way. Likewise for Hamburg activity at locations EPOI009 EPOI010 (north west) has risen to 112 (+12%) and fallen at EPOI007 to 86 and to some lesser extent EPOI008 (south east).

We expect locations with stagnating logistics activity to see downward pressure on demand and take-up with increased vacancy risk and reduced rental growth prospects as there is less goods flowing through those submarkets.

Investors and users can monitor both market dynamics through our standardised data (135 EPOI geolocations) or can provide asset locations for detailed nowcasting for their specific assets or exposures.

Paris TVF as of 29.11.2024

Hamburg TVF as of 29.11.2024

If you would like access to data across Europe and the US or evaluate activity for your specific assets and allocations or contemplated transactions, please contact info@kaniaadvisors.com