Across Europe airports are getting busier and with that comes an increase in demand for property to cater, not just for the needs of an ever-growing number of passengers but also, for the ever-growing airfreight volumes.
In the latest edition of its yearly Airport Property Market Survey report property consultant King Sturge says: ”Air freight companies are relocating to airports that can serve the booming markets in Eastern Europe. The growth of air freight traffic at these airports is expected to stimulate demand for the development of property and infrastructure facilities.”
London Heathrow, the largest freight airport in the UK, remains the most expensive industrial location in Europe for occupiers, with prime off-airport rents now at €238 per sq m compared with €42 per sq m in Liège and Antwerp.
For prime industrial space over 5,000 sq m rents range from €38 per sq m in Liège, up to €211 per sq m around London”s airports. Such units are not necessarily located adjacent to the airport.
The airfreight market in the UK is dominated by the three biggest London area airports (Heathrow, Gatwick and Stansted), which together Air freight companies are relocating to airports that can serve the booming markets in Eastern Europe. The growth of air freight traffic at these airports is expected to stimulate demand for the development of property and infrastructure facilities accounted for 73.4 per cent of cargo handled in 2006.
Several regional airports in the UK have increased their cargo handling capabilities in recent years, largely as a result of the growth of ”integrators”, companies offering door-to-door delivery services, usually using their own road transport, handling, transit warehousing facilities and aircraft. Examples include DHL, Fedex, UPS and TNT.
For the 12 months to June 2007, growth of prime rents for industrial property was reported for seven of the 25 airports covered by King Sturge”s survey, 16 saw no change, while rents fell back at two.
Rent growth was strongest at Gatwick, Birmingham and Bournemouth with prime rents at the mid point of 2007 some eight to nine per cent higher than the preceding year.
Across Europe growth in prime industrial rental values for both large and small industrial property picked up over 2006. The increase was due to stronger economic activity and increased volumes of cargo passing through Europe, as a consequence of booming international trade.
King Sturge says: ”The Western and Central European Index for rent values suggests that for 2007 rent growth for large industrial units has stabilised, with a dip in rental growth for small industrial units.”
The major Western European hub airports continue to lead the market in terms of freight throughput, with freight-handling companies taking advantage of the international network of passenger flights routed through these airports to carry cargo.
Compared with cargoes transported by water or road, airfreight represents a small percentage of the total cargo volume transported throughout Europe.
The cargoes that are moved by air are those for which value and delivery time are more critical, be that general air freight which may take several days to deliver or express air freight for which delivery time is measured in hours. Traditionally, airfreight has been used for high-value commodities, fragile goods and commercial documents such as legal and financial papers. However, with increases in capacity and declining freight rates the range of goods carried by air has widened. Now, perishable commodities such as luxury foods, exotic fruits, chilled meat, fish and flowers, newspapers and electronic products such as mobile phones are growth areas for air transport. Growth in airfreight transportation is expected to continue, driven by increasing consumer demand across Europe for these commodities.