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Investment activity in Europe's logistics market is expected to remain strong in the next few months as it continues to attract an increasing number of institutions, according to Tom Waite, JLL’s director of European capital markets.

‘There is plenty of global capital chasing logistics. A number of other sovereign wealth funds are looking to access the sector, typically through a joint venture with a blue-chip company. We might see a shift in M&A activity towards mid-sized companies in the future as most of the pan-European players have already teamed up with an institutional equity provider,’ Waite told PropertyEU.

The sector has seen a wave of large transactions in recent months including the acquisition by US private equity fund TPG and Canadian group Ivanhoe Cambridge of the Pointpark Properties business from Arcapita. Recent deals pointing to the growing appeal of logistics also include the creation of a joint venture between UK REIT Segro and Canada's pension fund PSP with the aim of establishing a €2 bn Continental European logistics platform.

Similarly, New York-listed real estate manager Brookfield Property Partners acquired UK-based logistics developer Gazeley and said it planned to expand aggressively across Europe. US-based private equity group Blackstone also said it is seeking to double the size of its European logistics arm LogiCor ahead of a potential Initial Public Offering. In March this year, Norway's giant oil pension fund completed the acquisition of a half-share in a €2.4 bn portfolio from New York-listed Prologis.

According to Phil Marsden, head of European Logistics & Industrial at JLL, logistics offers a compelling investment opportunity given the high income component and high return. ‘We think that there are excellent prospects for the logistics market, which are being recognised by the likes of Blackstone, PSP, Norges and Brookfield. There has been almost no speculative space built over the past five years - the current growth in development activity is driven by built-to-suit and owner occupier projects, meaning supply continues to be very tight. E-commerce and supply chain restructuring are factors driving more demand and there continues to be the anticipation of rental growth.’

See also related articles and the videos of the Logistics Investment Briefing held at Expo Real on the PropertyEU TV channel on youtube.