Valencia AAG Logistics Q1 2014 (Eng).pub

At a Glance
Valencia has seen two consecutive years of considerable
activity on the part of demand, despite the slight reduction in
2013
Valencia Logistics
Q1 2014
The vacancy rate continues to fall and the scarcity
of units exceeding 10,000 m² is noteworthy
VIGOROUS TRANSACTION ACTIVITY IN RECENT YEARS
The automotive industry stimulates demand for logistics units in
the southern zone of Valencia
Trend in transaction volumes
m²
160,000
140,000
120,000
BNP Paribas Real Estate – Research
100,000
80,000
60,000
40,000
20,000
0
2006
2007
2008
2009
2010
2011
2012
2013 Q1 2014
Transactions by size (Q1-2014)
TRANSACTIONS FOCUSED ON UNITS OF LESS THAN 5000 M²
The share of transactions relating to large-scale units falls due to
the reduced offering of these types of facilities
13%
37%
BNP Paribas Real Estate – Research
13%
37%
< 3,000 m²
3,000 to 5,000 m²
5,000 to 10,000 m²
>10,000 m²
Logistics stock and vacancy rate
Parque (izq)
Tasa de disponibilidad ( dcho)
m²
%
1,800,000
18
1,500,000
14
1,200,000
10
8
600,000
6
4
300,000
2
0
0
2007
2008
2009
2010
2011
2012
2013 Q1 2014
BNP Paribas Real Estate – Research
12
900,000
The majority of transactions were undertaken on medium or
small scale units (66% in 2013 and 75% in Q1 2014), in part due
to the scarcity of very extensive facilities. Nonetheless, demand
exists for units in excess of 10,000 m². This is unsatisfied due to
the lack of immediately available product, lengthening the search
times for floorspace meeting the requirements of users.
Historically, the most sought-after logistics zone consisted of the
Ribarroja del Turia, cornering some 65%-75% of transactions and
floorspace taken up. This position of dominance has, however,
changed since last year. The area of Almussafes has attracted a
significant portion of demand, cornering almost half of
transactions and floorspace transacted in 2013 and during the
first quarter of 2014 .
SUPPLY VERGING ON SCARCITY
The vacancy rate has fallen continuously since 2010, reaching
6.5% in Q1 2014
16
2006
The logistics market in Valencia stands entirely apart from the
general trend for other sites in Spain, thanks to the expansion of
the Ford vehicle factory in Almussafes, the port activity and the
integration of new distribution activities towards southern France.
With take-up of 130,000 m² in 2013 and 38,000 m² during Q1
2014, both figures exceeding the historic averages for annual and
quarterly take-up respectively, any interpretation must be
positive. The main driver of occupancy consisted of an expansion
in activity. Only 30% of transactions during 2013 were motivated
by consolidation and the improvement of facilities. With two out
of every three transactions the main prospective tenants
currently consist of logistics final users, the remainder consisting
of logistics providers.
The healthy performance of demand and the standstill in real
estate development have led to low levels of vacant supply.
Somewhat less than 100,000 m² of immediately available supply
exists in Valencia, a vacancy rate of 6.5%. This level of vacancies
may activate a number of private developments. Although there is
still no sign of development activity, demand remains constant.
This may give rise to a bottleneck in the logistics market in
Valencia towards the close of 2014 and during 2015 .
AT A GLANCE - VALENCIA LOGISTICS MARKET - Q1 2014
Vacancy rate in the main zones
Centre
North
CENTRAL AND SOUTHERN ZONES AT “PRE-CRISIS” LEVELS OF
SUPPLY
Developments could be activated during the second half of 2014
and in 2015.
South
%
30
25
BNP Paribas Real Estate – Research
20
15
10
5
0
2005
2006
2007
2008
2009
2010
2011
2012
2013
Trends in rents
Max
Min
€/m²/month
The zones of Ribarroja and Almussafes/Sollana have vacancy
rates standing at 6.5% and 6.2% respectively. These levels have
not been seen since 2006 and verge on scarcity. More specifically,
around 60,000 m² exists in the area of Ribarroja (A-3 Highway)
and 23,000 m² in the vicinity of the Ford factory in Almussafes
and Sollana. This low level of vacancies for logistics units
restricts the establishment of new logistics operations,
particularly those relating to national distribution requiring floor
spaces in excess of 10,000 m². Additionally there is an impact on
rental prices with increases being seen in asking rents in the
southern zone during Q1 2014. Lastly, these levels should
stimulate developer activity with regard to units. A drought of
new build has existed since 2008 and the reactivation of privately
driven projects currently at a standstill may be seen. For its part,
the vacancy rate in the northern zone has grown to 15%.
However, that area’s low levels of logistics activity and with only
7000 m² available, means that it is not a pressure valve for the
market.
7
PRIME RENTS UNCHANGED OVER THE PAST YEAR
The aggregate drop since the peak in 2007 amounts to 50%.
6
BNP Paribas Real Estate – Research
5
4
3
2
1
0
2006
2007
2008
2009
Logistics stock and vacancy rate
2010
2011
2012
2013 Q1 2014
The best logistics units in the area of influence of Valencia have
rents of €3-€3.50/m²/month. Production at the Ford factory in
Almussafes has converted the area into a new prime zone, where
the rents for the best units exceed those of the prime units in the
area of the A-3. Nonetheless, Valencia remains competitive in
rent compared with other sites such as Madrid and Barcelona,
offering rents for logistics units which are some 20%-30% lower.
Increases in rents are anticipated for the close of 2014, putting an
end to the downward cycle in the Valencian logistics real estate
market.
OUTLOOK
Scarcity could increase during the second half of 2014
Demand in the pipeline could point towards transaction activity
similar to or slightly lower than that of 2013. At the same time,
space reduction and regrouping strategies are no longer the
flavour of the month, leading to positive take-up and a reduction
in the available supply. Within this setting, 2014 will close with
higher rents in the most sought-after zones, representing a
stimulus to activity on the part of developers. It is possible that
developments which came to a standstill in 2008-2012 will be
coming to life once again.
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without the prior permission in writing of BNP Paribas Real Estate.
Publisher and copyright: BNP Paribas Real Estate
Further Information BNP Paribas Real Estate | Valencia brunch office| Telephone +34 963 163 120| www.realestate.bnpparibas.es
Letings and sales: Sandrine Carriere —Head of Industrial/Logistics, Valencia. Email: [email protected]
Joaquín Ivars — Head of Levante territory. Email: [email protected]

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