Logistics property boom: high demand for quality space in the Ruhr region remains strong
(Essen, 20 July 2023). After a subdued start to 2023, the logistics property market in the Ruhr region developed well over the 1st half of the year. Brockhoff continues to receive high-quality requirements. However, transactions currently take longer to complete as decision-making processes have slowed.
Tenants in the Ruhr region include many companies involved in last-mile delivery. Companies in the leisure and sports sectors have also shown growing interest in logistics space. LIGHT INDUSTRIAL halls and business parks offer them ideal locations.
Brownfield development is the future in the Ruhr region
The Ruhr region’s dense development makes it challenging to find suitable sites for new logistics locations. There are no longer undeveloped greenfield sites for big-box logistics operators in existing commercial areas. The debate over designating new commercial land is intense: municipalities want more jobs, while also seeking to reduce environmental impacts and soil sealing. Big-box logistics operators in particular are viewed as land-hungry, generating heavy traffic but few jobs. Thanks to its strong network around the Ruhr metropolis, Brockhoff finds suitable sites for these companies. Opportunities also arise for smaller spaces within the region. Recently, for example, an undeveloped 4,266 m² site in Gelsenkirchen with approved building plans was sold. The owner approached Brockhoff and opted for a discreet sale.
Brownfields—former industrial sites redeveloped for logistics—are common in the Ruhr region. They have the advantage of already being sealed, requiring little or no additional land sealing. This supports the European Commission’s goal of achieving net-zero land take by 2050. Still, the challenges should not be underestimated: brownfields in the Ruhr region are often former mine or steelworks sites with significant soil contamination. Open, intensive communication with municipalities is needed to advance changes of use. The former Babcock site in Oberhausen is a successful example: its halls have been fully developed and revitalized with a long-term mix of tenants.
Rents continue to rise moderately
Demand for logistics and Light Industrial properties in the Ruhr region is expected to remain high. As newly designated logistics and industrial sites become increasingly scarce, pressure on existing properties will grow, likely leading to moderate rent increases.
In the past, halls in the Ruhr region often rented for €3/m². Today, rents can be more than double that. If a company has little flexibility in choosing a location for strategic reasons, it may accept individually high rents and limited amenities if necessary. This makes general statements about regional rent levels difficult; they depend on the tenant and its reasons for choosing a location.
€6.90/m² is no longer unusual for a modern new-build hall. Some owners are asking €8/m² or €8.50/m², partly because of higher construction costs. Companies are now willing to pay these rents, including for existing properties, when the space meets their requirements—especially their preferred location.
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Über Brockhoff
Brockhoff GmbH is Germany’s largest local commercial real estate broker and the real estate market leader in the Ruhr region. The owner-managed company, based in Essen, was founded by Eckhard Brockhoff in 1987. With more than 35 years of industry experience, it has extensive expertise in marketing OFFICE, INVEST, RETAIL, and LOGISTICS properties. Its portfolio includes nationwide sales of office and investment properties, office lettings focused on the Ruhr region, brokerage of retail properties in prime 1a locations in German towns and cities of all sizes, and leasing and sales of logistics properties. In 2021, SORAVIA, a leading real estate group in Austria and Germany with more than 3,300 employees, acquired a 41% stake through its subsidiary ADOMO .