Italy

Logistics
Market
Overview
Snapshot Q1 2023
Investments
Reshoring: How Pandemic and War
Have Changed the Logistics Sector
An unstable international context, soaring This is the case of Bianchi, a historic Italian
energy prices, shortage of raw materials and bicycle manufacturing company, which is
rising inflation: all these factors have accelerated bringing home part of its production, with a new
a trend that was already underway, highlighting 10 thousand square metre production plant,
the limits of the globalised market. In this which will allow a four-fold increase in
scenario, the priority has been — and continues production from the current 250-300 bicycles
to be — to protect value and logistics chains per day to 1,000-1,500 units. This required an
against unexpected events that could result in investment of around €30 million, and the
significant delivery interruptions or delays. The second step of the strategy is already in the
main driver is therefore no longer cost pipeline: an additional investment to also bring
containment, but rather the containment of back frame production to Italy.
risks arising from this new scenario. It is in
If we take a closer look at logistics, we can see
this context that the reshoring phenomenon,
that 'stockpiling' is today's watchword: stocks
which is impacting various economic sectors,
that can cope with possible bottlenecks or
including logistics, has to be framed.
slowdowns in imports due to sanctions,
After a long period of delocalisation, the Covid- pandemics or wars, or possible price hikes as a
19 pandemic had already contributed to result of the current inflation rates. In logistical
boosting the phenomenon of reshoring — terms, there has been a move from 'just in
businesses returning to their countries of origin time', a prompt production and distribution
— and friendshoring — businesses moving process based on consumer demand, to 'just in
towards 'friendly' countries. In fact, the forced case', keeping all the stocks needed to protect
closure led to a complete review of a model that the business, as pointed out above, from the
was no longer working, convincing several risks that the current international scenario
companies to consider this option in order to could present. All this brings users to look for a
eliminate or reduce their dependence on greater quantity of logistics spaces, as proved by
suppliers — mostly Asian — that were no longer the fact that take-up in Q4 2022 alone was
as competitive as in the past. 730,000 square metres of warehouses — an
unprecedented record in Italian logistics.

“After a long period of delocalisation,

the Covid-19 pandemic had already
contributed to boosting the
phenomenon of reshoring ”.
 Investments
Key data
Italy

€ 257m +15% 5.00%

Investments in Q1 2023 Portfolio Deals Prime Yield

-60% & -25% € 2.8Bn +110bps & +25bps

Investment Trend YoY Investments in 2022 Yield Trend
(Q1 2023 on Q1 2022 vs 4 (Q2 2022 - Q1 2023) (YoY & QoQ)
quarters yearly rolling data)

Investment Trends
• Q1 2023 confirmed the macroeconomic prime yields and in turn boost investments
slowdown already experienced over the second over the next few quarters. Swap rates also
part of 2022. The risk adverse trend shown started to show stability ranging between 2,6%
during the final part of the year remain solid. to 2,8% (3m 5y SWAPs)
• The challenging debt market conditions • Q1 2023 recorded € 257m of Investment,
(apprx. 180bps raised by ECB in the past 6 totaling an impressive € 2.8bn on a rolling
months) together with the slow adjustments yearly basis (-60% decrease YoY and -25%
in the bid-ask spread by the sellers enhanced comparing cumulative data at Q1 in 2023 and 2022)
the scarcity of investments over the last • The Italian prime yield demonstrated a
semester. Given these conditions, we expect significant downturn over the last semester
more equity-based investment strategies which directly followed the high cost of debt
with postponed financing, targeting assets with and rising interest in the bond capital markets.
strong potential in terms of rent reversion and It rose 25bps since last quarter and compared
with strong covenants. to Q1 2022 it gained 110bps closing at 4.75%
• Despite the recent macroeconomic facts, we are NIY.
still seeing significant appetite in the logistic • We believe the strong fundamentals that
asset class driven by positive industry forecasts backs the logistic asset class as well as the
and a strong net absorption. Q1 2023 ended steady and strong demand from the
with positive results from a few sell-side operators will provide the right comfort to
processes which we expect will crystalize the investors to allocate their capital effectively.

3.500 35% CAGR 9

26%over
CAGRthe last 5 years
over the last 5 years * 8
3.000
7
2.500
6
Prime Yield (%)
Millions of €

2.000 5

1.500 4
3
1.000
2
500
1
0 0
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
Investments Prime Yield %

* 5y CAGR is calculated considering the cumulated investment volumes until end of 2022. Q1 2023 represent an outlier and partial data.
 Take up &
Key Statistics
Italy
Take-up Trends
• The Italian logistic absorption is demonstrating account for apprx. 38%.
to be the key driver of the asset class
• We are recording a rising number of big-sized
expansion showing a steady and solid growth
searches which in this quarter touched 68% of
over time.
the total take up (considering warehouses
• Data highlights a record breaking take up over above 20k sqm)
the last 4 hitting approx. 2.65m sqm (635,200
• We are seeing a larger proportion of BTS and
sqm only in Q1 2023 and 6% increase over the
BTO developments with avg. sizes above 19k
same period in Q1 2022)
sqm. This trend accommodates a larger demand
• Take up registered during Q1 2023 was slightly from operators and manufacturers that have
below the data showed during Q1 2022, however, specific needs and long-term expansion plans
this quarter showed 25% overperformance
• Final clients are seeking even more for newly
considering Q1 results in a 5y timeframe
built (Grade A) and ESG compliant* warehouses
• This positive trend highlights a rising interest which in this quarter accounted for almost the
from logistic operators (especially 3PL) which totality of the total take up (91%). ESG trend will
account approx. 51% of the total absorption. In be a key driver for the future expansion of the
addition, significant demand comes from asset class leading to rising demand and
retailers and e-commerce players which especially higher rents.

3.000
10% CAGR
over the last 5 years **
2.500
Thousands of Sqm

2.000

1.500

1.000

500

0
2016 2017 2018 2019 2020 2021 2022 2023

Q1 Q2 Q3 Q4
*ESG Compliant asset obtained at least the Leed Gold or Bream Very Good certificate ** 5y CAGR is calculated considering the cumulated take up values until end of 2022. 2023 data are still partial

635,200sqm -11% +6% 51% 91%

Take-up Q1 2023 Take-up Growth YoY 3PL Absorption Proportion of ESG
(Q1 2023 on Q1 2022 vs compliant assets leased
4 quarters yearly rolling data)

Prime Rents Milan Rome Turin Verona Bologna Piacenza

(€/sqm/y)

Q1 2023 63 63 49 52 60 53
3y CAGR 5,1% 6,1% 5,5% 6,3% 5,4% 6,2%
 Q4 2022 Take-up by Provinces (GLA-sqm) Take-up Characteristics Considering Type
of Tenants, Assets Types and Drivers
100.000 140

90.000
120
3PL
80.000
Courier

100 E-commerce
70.000
Manufacturing

60.000 Retailer
GLA Leased (sqm)

80

Rent €/sqm/y
50.000

60
40.000

30.000
40

20.000 BTO
20 BTS
10.000
Existing

Speculative
0 0

Tot. GLA (sqm) Max Rent (€/sqm/y)

Take Up Distribution by Regions

Liguria
Toscana
Campania
Veneto
Marche
Lazio
Puglia
Piemonte
Lombardia
Emilia Romagna

0 20.000 40.000 60.000 80.000 100.000 120.000 140.000 160.000

Vacancy &
Pipeline
Italy

Planned Speculative Developments and Vacancy in the

coming years (potential GLA-sqm)

1.200.000 4,500,000 sqm

Potential Spec. Developments
coming to the market (GLA)
1.000.000

800.000

600.000

400.000

200.000

0
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2

2022 2023 2024 2025

Fast Facts
on potential development
o The absorption rate of new developments is o Despite the uncertainty recorded lately, we are
showing quite impressive results with the still seeing a strong demand for logistic
vast majority of the projects being leased development that can deliver above average
before the construction end date returns. However, more attention on market
fundamentals, rental increase and absorption
o The vacancy rate remain stable below 2% all
trends led to reduced number of land
over Italy considering few sub-markets where
transactions and active institutional players.
the vacancy rate is closer to zero
o South of Italy and emerging sub-markets
o High construction costs and difficulties in
such as Genova, Trieste/Udine and the Adriatic
getting building permits pushed a few project
Coast are attracting even more capital
to deliver with a slight delay as well as to
rising asking rents. o Despite some delays, 2022/2023 will see
apprx. 4,6 mln sqm coming to the market as
o The high costs of financing as well as the
speculative developments all over Italy
significant uncertainty led investors to put
on hold various projects and to renegotiate o The Italian main ports and airports,
land prices which on average decreased 15% especially if connected with the railways, are
to 20%. becoming even more demanded by investors.
Intermodality is becoming a critical
desiderata both from operators and investors.
 Available GLA entering the Italian Logistic Market in the next 2 to 3 years.
Pipeline concentration divided by Provinces

New sqm coming to the market Italian Vacancy & Pipeline divided by Type
– Main Provinces (GLA – Thousands of Sqm) (GLA – Sqm)

948.215
948.215
Cremona
Parma
492.657
492.657

Bari
Lodi
Torino
Piacenza 5.314.580
5.314.5
Caserta
3.473.536
3.473.536
Alessandria
Verona
Novara
507.123
507.123
Pavia
Milano
Roma
Bologna
Bergamo BTS Existing
Speculative Under negotiation
0 500 1.000 1.500 Under Construction
Contacts

EMEA – Logistics Capital Markets

Edward Plumley
Director Cross Border Logistics Capital Markets
[email protected]
+44 7595 123288

ITALY – Capital Markets

Silvio Sancilio
Head of Capital Markets
[email protected]
+39 3387469372

ITALY - Logistics, Last Mile & Data Centers Research

Faustino Musicco Giovanni Mazzacani Simone Roberti

[email protected] [email protected] [email protected]
+39 348 460 2502 +39 334 625 0708 +39 348 380 6762

Domenico Marino Luca Invernizzi Angelica Solfaroli

[email protected] [email protected] [email protected]
+39 334 625 0708 +39 337 163 3111 +39 338 655 5909

Alessandro Daffrè Matteo Ferri

[email protected] [email protected]
+39 331 403 7282 +39 366 571 6790

Offices
Milano Roma
Via Giuseppe Mazzini, 9 Via Leonida Bissolati, 76
20123 00187

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