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June 2017 JLL’s Supply Chain Activity Index
JLL’s Supply Chain Activity Index2
The Index rose to 131.5 in Q1 2017, up 0.7% over the quarter. Although down from 1.3% in Q4, growth remained above the long-term trend. Q1 aggregate European take-up increased 5% on the same quarter last year. While below the unprecedented 6.1 million sq m achieved in Q4, this still marked the highest first quarter on record. Moreover, take-up has now exceeded 4 million sq m for eight consecutive quarters.
Looking ahead the Index should post further gains in the next six months, albeit at a slower quarterly rate of 0.2%-0.5%.Forecasts for GDP and trade growth indicate further moderate rises. Although economic sentiment is expected to soften somewhat, it should stay well above the long-term average.
The Index’s Q1 Highly-positive EU economic sentiment was a key contributor to the Index’s Q1 growth.Economic sentiment in the EU is now at its highest level since the global financial crisis in 2008. All other component series of the Index also made positive contributions to growth over the quarter.
Take-up over the nine months to September 2017 could increase by 8% year-on-year, with the next two quarters averaging around 4.8 million sq m. The component series of the Index do not point to major risks to occupier demand over the next few quarters. Indeed, economic indicators seem to have shrugged off the uncertainties created by Brexit, particularly following the setbacks for far-right populism in the Dutch and French elections.
Our market analysis confirms continued deep demand for warehousing from multiple sectors driven by a combination of growth and change. Indeed, at present, potentially the major risk to take-up growth in the short-term is a limited availability of stock.
JLL’s Supply Chain Activity Index shows continued above-trend growth in European warehouse take-up, but the pace of expansion is likely to moderate
Investor Investor appetite remains robust.The continuing strong occupier demand predicted by our Index, coupled with record low vacancy, implies that the market balance remains highly favourable for investors.
3 JLL’s Supply Chain Activity Index
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JLL Aggregate European Logistics Property Take-Up Compared with Supply Chain Activity Index
© 2017 Jones Lang LaSalle IP, Inc. All rights reserved.All information contained herein is from sources deemed reliable; however, no representation or warranty is made to the accuracy thereof.
Q1 2017
For more information, contact: Guy GueirardHead of EMEA Industrial & Logistics+33 (0)6 59 03 74 [email protected]
Jon SleemanHead of EMEA Industrial & Logistics Research+44 (0)207 087 [email protected]
Alexandra TornowEMEA Industrial &Logistics Research+49 (0)69 2003 [email protected]
Ryan LoftusEMEA Industrial & Logistics Research+44 (0)20 7087 [email protected]
