SEGRO: Navigating market headwinds with speculative strength

At EXPO REAL in Munich, CRE Media Europe caught up with Jim Hartley, managing director Northern Europe (Germany & Netherlands) at SEGRO, who outlined how the developer is maintaining momentum in Germany and the Netherlands despite challenging macroeconomic conditions.

Jim Hartley

At EXPO REAL in Munich, CRE Media Europe caught up with Jim Hartley, managing director Northern Europe (Germany & Netherlands) at SEGRO, who outlined how the developer is maintaining momentum in Germany and the Netherlands despite challenging macroeconomic conditions.

In Berlin, the company recently delivered 25,000 m2 of light industrial and 18,000 m2 of logistics space.

In Dortmund, SEGRO is completing two logistics facilities totalling 50,000 m2, while in Düsseldorf 15,000 m2 of light industrial and a subdivisible 20,000 m2 urban logistics centre is currently under construction.

"We are very fortunate to be in a very strong position of having well-established parks in major cities like Düsseldorf, Frankfurt, and Berlin. We have the latest development phases either under construction or just completed that we're looking to let up," explained Hartley.

Shift in occupier dynamics

Hartley acknowledges that occupiers are exercising greater caution. Decision-making processes have lengthened significantly across both big-box logistics and light industrial properties compared to previous years.

Tenants are increasingly choosing to extend existing leases rather than commit to new sites unless necessary.

Demand is primarily driven by occupiers consolidating multiple older, inefficient facilities into a single modern, fit-for-purpose warehouse.

While negotiations require more time to finalise, inquiries remain steady for prime, well-located space with strong sustainability credentials.

Power grid challenges and data centres

SEGRO is actively exploring data centre opportunities within its existing portfolio, particularly in key FLAP-D markets like Frankfurt.

However, grid congestion remains a primary hurdle across both Germany and the Netherlands. SEGRO continues to work through power permitting and capacity feasibility to evaluate converting select light industrial parks into data centre locations where grid connection permits allow.

A key differentiator is its footprint across the full spectrum of unit sizes and formats, ranging from 400 m2 units for light industrial tenants up to 85,000 m2 big-box logistics facilities.

Pipeline through 2027

The completion pipeline across Germany and the Netherlands includes 180,000 m2 delivered in the current period and 180,000 m2 scheduled for completion in the upcoming phase.

Despite a more demanding market backdrop, Hartley remains confident in the fundamentals of prime urban and regional logistics.

"I am an optimist. By giving the market high-quality space and prime locations, I remain confident that we will get that space well-let to strong covenants," concluded Hartley.

Branislav Pekic