Logistics real estate concern Prologis has released a report on its activity in the fourth quarter and the whole year 2018 in Europe, which shows that the company signed 205,059 sqm of new leases and 385,501 sqm of lease renewals during Q4 2018 alone.
For the entirety of 2018, total leasing activity comprised 3.06 million sqm, which the company regards as an expected decrease, according to a press release sent to the Budapest Business Journal.
The companyʼs most important new leases of the last quarter were: 20,150 sqm for Maurice Ward Group at Prologis Park Pilsen II, Czech Republic; 25,707 sqm for ID Logistics at Prologis Park Clesud, France; 21,869 sqm for Transport International Transmec at LʼIsle-dʼAbeau, France; 15,986 sqm for Picnic at Prologis Park Eemhaven, Netherlands; and 10,339 sqm for an automotive giant at Prologis Park Munich-Neufahrn, Germany.
"Our portfolio has never been in better shape," asserted Ben Bannatyne, president of Prologis Europe. "Demand is healthy, and we finalized our multi-year disposition program ahead of schedule, redeploying those proceeds into development. Now, our focus is on capitalizing on rent growth and the tremendous benefits that come from our scale, including an intense focus on customer service that centers on solving our customers’ pain points and elevates our relationships with them."
The 12 new developments in Q4 2018 took place in the Czech Republic, France, Italy, the Netherlands, Slovakia and the United Kingdom, totaling 287,783 square meters, with 31.1% build-to-suit and 68.9% speculative.
Developments begun in Q4 included: a 49,700 sqm speculative build at Prologis Park DIRFT III, United Kingdom; a 39,400 sqm speculative build at Prologis Park Brno, Czech Republic; a 30,176 sqm BTS expansion at Prologis Park Tilburg, Netherlands; and a 22,084 sqm speculative build at Prologis Park Siziano, Italy.
During the whole of 2018, the company started 15 build-to-suit and 22 speculative projects with a combined total of 918,076 sqm, of which 47.6% is pre-leased.
"Supply in the fourth quarter was healthy and in line with the strength of immediate demand, which, together with continued low vacancy rates, allowed for a disciplined increase in speculative building," said Bannatyne. "Market conditions remain very good as demand is diverse and broad-based, while supply remains disciplined. Our strongest markets include Germany, the Netherlands, the Czech Republic, Italy, Spain, Hungary, and Sweden, in order of net operating income."
During the quarter, Prologis acquired six buildings in the Netherlands, Spain, Sweden and the U.K., with a total of 105,367 sqm, as well as six land plots in the Czech Republic, France, Italy and the Netherlands, with a net rentable area of 218,323 sqm. Building acquisitions for the whole year totaled 157,663 sqm, alongside 1.7 mln sqm of land.
Prologis also disposed of 57 buildings amounting to 1.06 mln sqm in Germany, France, Hungary, Italy, the Netherlands and Spain. During the quarter, the firm also sold nine land parcels in France, Italy, Hungary and Poland, with a net rentable area of 780,698 sqm. Full-year 2018 building dispositions came to 1.75 mln sqm, while land sales comprised 1.38 mln sqm.
At the end of Q4 2018, the company owned or had investments in, on a wholly-owned basis or through co-investment ventures, properties and development projects totaling 16.3 mln sqm on the continent, the press release concluded.