Capital continues to flow into European industrial and logistics real estate, with investment volumes rising 4.6% in Q3 2013 and nearly 40% on the same period last year, according to the latest research from CBRE.
Capital continues to flow into European industrial and logistics real estate, with investment volumes rising 4.6% in Q3 2013 and nearly 40% on the same period last year, according to the latest research from CBRE.
The European industrial and logistics market has attracted just over €10 bn of investment to date in 2013, surpassing the full-year total for each of the past four years, CBRE said. Transaction activity was once again significant in the UK, Germany, France and the Netherlands. Prime yields have edged down in some markets, most notably in the UK.
'The entry of predominantly North American private equity funds has injected liquidity into a market that offers attractive risk-adjusted returns secured against diversified income streams,' said James Markby, head of European industrial and logistics investment at CBRE. 'We are also seeing the re-entry of institutional players seeking to access the light industrial market to enhance their distribution yields. Investors are also taking advantage of a pronounced improvement in secondary industrial values across the major European markets.'
Against a weak economic backdrop, industrial and logistics development remains slow, which is exerting upward pressure on rents at the prime end of some markets, as well as keeping vacancy rates for good stock low. As a result, there are some cases of new stock coming to market in Central and Eastern Europe (CEE) and being absorbed immediately, CBRE's research found.
In Moscow, 526,000 m2 of warehouse space was delivered in Q3 2013 and another 207,000 m2 is expected to complete in Q4 2013, with 90% of this pre-let. Valentin Gavrilov, director of CBRE's research department in Russia, said: 'In 2013 Moscow will witness 1 mln m2 of newly delivered warehouse space. It will be a record high since 2007.'
