Take-up of commercial space reached a total of around 145,000 square metres in Cologne’s city area, thanks to a small number of large units being taken up. However, Greif & Contzen’s latest market report shows that demand for space in the Cologne | Bonn region is mostly limited to small units.

It's an impressive figure: at around 145,000 square metres, take-up of warehouse space in Cologne’s city area has doubled compared to the same period last year. While 2023 was a rather weak year, a longer-term comparison shows that 145,000 square metres correspond to the quarterly level reached in the most recent peak year of 2022, and that it is likely that a new take-up record will be set at the end of the year.

Large-scale transactions are the exception
Does that mean that everything is going well in the industrial, storage and logistics space market of Cologne and the surrounding region? The breakdown presented by the real estate experts from Greif & Contzen in their latest market report shows that this is not quite the case. The report explores the commercial property market of the Cologne | Bonn region and can explain this high take-up figure: “A number of exceptionally large units were taken up,” says Frank Klähn, Head of Industrial and Logistics Properties at Greif & Contzen Immobilienmakler GmbH, adding that “the online furniture retailer Woltu alone took up 44,500 square metres in Cologne’s neighbourhood Bickendorf”. “Another 25,400 square metres were accounted for by the logistics company Blitz GmbH taking up a unit in Cologne-Marsdorf, while 14,000 square metres were taken up in Cologne-Rodenkirchen by Ontaro GmbH, which is also from the logistics sector,” reports Daniel Noeckel, Senior Consultant from the same department at Greif & Contzen. 

Overall situation: demand is mostly limited to small units
If the overall situation in the region is considered, as done by Greif & Contzen in its latest commercial property market report, it becomes apparent that these large transactions are isolated cases. Five companies taking up units ranging between 14,000 and 24,500 square metres in size have accounted for a large share of the space taken up in 2024 to date. The majority of commercial enterprises are affected by the challenging economic situation and are acting cautiously, owing to the uncertain outlook for the future. A total of around 260,000 square metres of space were taken up in the region over the course of the year to date (previous year: 165,000 square metres).

Lower prime rent, stable average rent+
The current prime rent also reflects the overall cautious wait-and-see attitude that dominates the market: “Owing to the lack of contracts being concluded for units in mint condition in the top segment, the prime rent dropped from EUR 8.50 last year to now EUR 7.50,” Noeckel explains. The average rent meanwhile remained stable compared to the year before, at around 6.10 euros per square metre. The same is true of vacant space: at around 155,000 square metres recorded in the Cologne | Bonn region, there has only been a slight increase compared to last year’s figure of 150,00 square metres. However, a geographic shift can be observed: the share of all vacant units in the region that are located within Cologne’s city limits increased significantly to around 48 percent.

Lack of availability leads to lower investment transaction volume
In addition to analysing the supply and demand situation of the letting market for industrial, storage and logistics space, the property experts from Greif & Contzen always take a look at the investment market, too: the transaction volume here decreased to just under 230 million euros. This corresponds to a decline by another twelve percent, compared to the same period last year that had already been rather weak. Thorsten Neugebauer, Head of Investment at Greif & Contzen, believes that this is due mostly to a lack of availability: “Interested customers are not able to buy anything if the shelves are empty.” Neugebauer continues by pointing out that there are many investors who are interested in this asset class. “Some investors are by now more interested in logistics properties than in office buildings.” Thanks to its central location in Europe and its proximity to urban agglomerations, the Cologne | Bonn logistics region is believed to have good future prospects, which is why investors continue to focus on the region. The fact that developers and owner-occupiers could repeatedly be found on the buying side can be considered further evidence of these future prospects. The logistics sector can benefit from the poor situation in the industrial sector that has a far more anxious outlook, if the land market is considered on its own: a number of premises were offered for sale after they had been given up by industrial companies. The demand from the investment sector can, however, not be met sufficiently. 

Outlook: lack of economic stimuli
Greif & Contzen does not anticipate that any considerable economic stimuli will occur up to the end of the year. “We therefore expect demand for space to remain largely restrained and that around 330,000 square metres will be taken up up to the end of the year,” says Klähn. “It is very likely that new builds will be let again in the medium term. This should also give rise to a higher prime rent once again, since property developers are keeping their asking rents on a stable level, despite the challenging economic situation,” Noeckel adds.