Furthermore, Dublin, Vienna, Amsterdam and Lisbon have all seen substantial prime rental growth of 14% or more over the last five years in the sector. In the case of Dublin, Vienna and Amsterdam, this is largely a consequence of low vacancy rates, exacerbated by a reduction in new stock, says the international real estate advisor.

Lydia Brissy, Director European Research at Savills, says: “Ireland (0.14 sqm), Austria (0.14 sqm) and the Netherlands (0.14 sqm) are among the markets with the highest retail warehouse supply on a per capita basis – above the European average at 0.10 sqm per person. In these markets growth in supply has been subdued as a result of a restricted development pipeline, and is not reflective of weak demand, evidenced by strong rental growth. In these more developed markets with a larger supply of stock, the potential for sales is higher.”

James Burke, Director, European Capital Markets & Global Cross Border Investment at Savills, says: “The retail warehouse sector is increasingly being seen as a hybrid operation by both occupiers and investors in the sector, providing traditional in-store retailing with last-mile delivery fulfilment options. As a result, we are seeing more and more investors looking at retail warehouses in smaller markets in Europe as they look to benefit from the strong fundamentals of the sector.”

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