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According to a study by the international property consulting firm CB Richard Ellis, the expansion of the logistics business in Spain will cause a total of 3.4 million square meters in new projects to be built by 2008 in Madrid, Barcelona, Valencia, Zaragoza and Seville alone.
By that time a good part of the Spanish logistics companies – which will primarily rent their facilities, causing prices to rise – will be concentrated in these five areas. So far this year rental prices have topped off at 7.5 euros per square meter a month in Barcelona, Santander and Zaragoza. The biggest rise in prices occurred in Madrid, where a 20% increase occurred in the last 12 months.
Growth of the logistics market and increased distribution has had an immediate effect on the property market in Spain as local and foreign developers shift their focus to investment in land for the construction of logistics platforms. Once a development is completed, investors seek out reputable firms to ensure long-term, dependable rentals.
Increased demand has highlighted the scarcity of supply in this market. In Madrid, only 110,000 square meters in logistics platforms are available for rental (40% less than a year ago), while in Barcelona availability barely reaches 3.6% of the total area devoted to the sector. CB Richard Ellis points out that, mid-term, rental prices will tend upwards because of the lack of supply. Currently prices range between 2.5 and 7.5 euros per square meter a month.
Zaragoza, Seville and Valencia are the preferred hubs for logistics companies. The market in Zaragoza has undergone rapid growth in the last few years thanks to its good location and the international attention brought to it by Pla-Za, the largest logistics platform in Europe. Seville also possesses several important logistics developments, while Valencia has boasted one of the strongest, most stable and most flexible sources of demand in the country for years.
In Madrid, activity in the logistics market has intensified for medium-sized platforms between 5,000 and 15,000 square meters. In the last year alone, thanks to numerous projects that surpassed regional records, investment in logistics rental in Madrid and nearby regions has risen by 200 million euros.
The study emphasizes the strength with which logistics and distribution companies have grown in Spain since 2003. Currently, the market represents 10% of the Gross Domestic Product – nearly as much as the tourist industry, traditionally considered one of Spain's economic mainstays.
