European demand for logistics space remains robust, but the market is entering a more selective phase. Companies continue to look for warehouses, but increasingly choose buildings that can support automated, technology-intensive and more efficient operations. This is shown by a survey by BGRE and Savills, in which more than 600 representatives of the sector participated.
The data shows both expansion and restructuring of warehouse networks. 47% of tenants expect to increase the area of their warehouses in the next one to three years, but 54% plan to vacate at least one building. According to the analysis, this is a sign that companies are optimizing their portfolios, consolidating networks and moving to more productive sites, rather than simply increasing their total area.
Power supply becomes a decisive factor
The quality of a building is now determined not only by location and square footage. The availability of sufficient electricity, the specification of the building, access to a workforce and the ability to adapt to new technologies are among the main criteria when choosing.
89% of tenants expect their electricity needs to increase, and more than a quarter already report insufficient capacity in the buildings they use. Almost half of companies are turning to new construction or custom-built sites. Only 19% are considering existing space.
“Occupants are no longer looking for just space, but for properties that can support more complex, technology-driven operations and deliver long-term efficiency,“ said Ben Segelman, head of European Industrial and Logistics at BGRE.Demand gap with new construction
The survey finds a gap between what tenants are looking for and what developers are increasingly planning to build. Demand is strongest for high-spec, often larger properties, while new developments are shifting to smaller warehouse buildings due to planning constraints, power supply and construction costs.
Among the markets in which investors are showing the greatest interest are the UK, Spain and Germany. Tenants are listing France, Germany, Italy, the Netherlands and Spain as their preferred destinations. Kevin Mofid, head of industrial and logistics research for Europe, the Middle East and Africa at Savills, describes the market as “slowing but not weakening”.
According to the analysis, the next stage will be determined not by the overall volume of demand, but by the qualities of the specific asset. Buildings with reliable power supply, good location and the possibility of technological renovation will maintain a stronger position, while older and less functional areas will face greater difficulties in attracting tenants.
Detailed statistics on average property prices in Bulgaria by cities and neighborhoods can be seen at imot.bg