The interest these players have on Malaga has consolidated during the last few years. «During the 24 months prior to the Covid-19 pandemic, both the rental and the investment markets were very active in the city, attracting the interest of high-end international investors», stated Fernando Corrales, director for Industrial and Logistics in Eastern Andalusia at CBRE.
Now, with the pandemic, this trend became even more clear. «The logistic segment will come out reinforced due to the growth of e-commerce caused by the confinement which will boost demand for e-commerce segments such as the pharmaceutical, food, technology and sports segments, which have registered levels of activity much above the usual during these last few months», highlighted Fernando Corrales.
It is within this context that CBRE classifies Malaga as the third most attractive city in Spain when it comes to investing in logistics, right behind Madrid and Barcelona.
This interest may even be the starting point to fix some of the issues the city is facing regarding this segment, such as the lack of logistic spaces, which is caused by «the high buildability within the city’s industrial and logistic parks, which sometimes surpasses 1.5%» and the lack of new developments «which may allow for the establishment of both national and international big distribution operators».
«The current logistic stock, around 525.000 sqm and availability rate below 4%, will grow in the coming years in Malaga with more than 80.000 sqm contracted using the key-in-hand formula. This will generate an increase in stock, but not in availability, which means that the city will remain one of the regional capitals with one of the smallest logistic areas in the whole of Spain», explained Fernando Corrales.
Since 2018 and during 2019, investors, developers and operators, both national and international, have been focusing on Malaga, in particular when it comes to seeking terrains for the development of logistic parks. Currently, the city has approximately 135.000 sqm in warehouses on the pipeline spread across three relevant projects. The new developments place Malaga’s average terrain at 200-250 €/sqm.
In terms of prime rent, currently consolidated at 5 €/ sqm/month, Fernando Corrales considered that «no relevant variations are expected be it towards an increase or towards a decrease. In terms of Malaga’s average rents, they are currently set at 3-4€/sqm/month and it is important to point out that there is a large difference between rents for existing assets (mostly obsolete) and rents for new or refurbished assets, which are closer to the prime values than to the average values».
In terms of the coming years, Corrales forecasts that «Malaga’s logistic market’s main indicators, such as absorption, occupancy rating, rent price evolution and profitability will have a very positive development and in 2021 and 2022 these indicators are expected to remain stable as they did in previous years».
