Spain's Severe Shortage of Sheds

MADRID-Despite being one of the five largest regional property markets in Europe, within the third fastest growing economy in Europe, Madrid’s short supply of industrial property is playing havoc for occupiers.

New research by King Sturge reveals that at the beginning of 2001 the availability of logistics warehousing was practically non-existent and there is very little new development. King Sturge’s Madrid market report shows that industrial rents have increased by 100% in the last three years and further rental growth is predicted.

John Thompson, investment partner for King Sturge in Madrid said: ‘Occupiers, especially those looking for large units will have an on-going problem finding space.’ And the shortage is boosting investment performance, with prime industrial investments in Madrid yielding about 8%. ‘In the face of a continuing shortage of availability, the total return is likely to exceed 12% for several years to come. This is one of the best rates of return for any market in Europe,’ said Thompson.