Logistics

Significant trends are influencing the logistics market, positioning logistics real estate as one of the strongest property segments in 2024. Demand for logistics space remains high, and combined with a limited supply, this has driven substantial rental price growth in prime areas.

Transactions Market

The logistics segment has undergone significant professionalization over the past decade. Additionally, geopolitical risk and the growing share of e-commerce have increased the segment's attractiveness due to expectations of a stronger rental market. This has led to heightened investor interest in logistics properties, as reflected in the transaction market, where logistics assets are taking an increasingly larger share of the total volume. In 2024, logistics properties account for 28 percent of the total transaction volume. As of August, the prime yield for logistics stands at 5.75 percent, reflecting a stable trend since the last yield increase in Q4 2023.

Logistics rent, large and small warehouses

Robust Rental Market

Despite challenging market conditions, demand in the rental market has remained robust. In recent years, demand has been driven by changing consumer habits, the growing share of e-commerce, and an increased focus on maintaining inventory availability for consumers (Just-in-Case). Rental rates have leveled off at high levels, with the rental price for large warehouses at NOK 1,700 per square meter. However, some areas have experienced rental price increases, with rates in Berger and Langhus being adjusted to NOK 1,700 per square meter from NOK 1,650 in the first half of 2024. For smaller, centrally located warehouses and last-mile logistics, prices rose to NOK 2,200 per square meter in 2023 and have remained stable since. A weak supply side and consistently high consumption suggest that there may be upward pressure on rental prices in the short term.

Logistics prime yield, percentage

Key figures

Outlook

Since 2023, the development of both the Norwegian and international economies have been significantly better than feared. Reduced uncertainty and more secure economic prospects are likely to boost consumer growth moving forward. This will lead to improved prospects for tenants in the warehouse and logistics sectors in the short term. Looking ahead, we expect upward pressure on rental prices, with very low vacancy rates and strong demand for space in the most attractive logistics hubs. In the longer term, the segment's attractiveness is expected to increase for both Norwegian and international players. International surveys indicate that European investors are highly positive towards logistics real estate and seek greater exposure to the segment when making investments in Norway in the future.