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Logistics properties – from niche to boom

The time when logistics properties were a niche product is long gone. Domestic and foreign investors are throwing themselves at this asset class, and demand on the user side is just as high. At the EXPO REAL SPECIAL REAL ESTATE FORUM and LogRealCampus, we will shed light on which types of property this entails–whether small scale or big box–and how this investment class compares to others during various events under the umbrella of the “Let’s talk logistics” motto. For the first time, the Logix Logistics Property Initiative will be presenting its own study on the economic significance of logistics properties.

 

There would surely be a silver lining if fewer goods were stored, commissioned, packaged and shipped in Germany, meaning fewer boring gray containers about and drastically fewer trucks on the roads. However, the many companies involved in logistics, one of Germany’s largest industries, collectively brought in over EUR 240 billion in the last year according to figures from the German Logistics Association. The growth of online trading, healthy domestic demand, and an expanding market for exports should keep the industry busy.

 

Asset class on a par with hotels

Companies are optimizing their logistics structure accordingly, contributing to the fact that demand for new spaces has been high for years. More and more investors from home and abroad are showing interest in logistics property thanks to the healthy figures from the industry. Plus, in comparison to office space or retail, logistics property boasts higher returns on investment. As it stands, in the first half of 2016, more than 10% of the total volume of commercial transactions was within this asset class, with CBRE, JLL, BNP Paribas Real Estate (BNPPRE), Savills and Colliers achieving a value of between EUR 1.8 billion and 2.1 billion. This puts the industry on an equal footing with hotels, just behind office spaces and retail properties.

 

When in doubt tolerate vacancy

 However, there are few prime properties in urban centers that lots of buyers have their sights set on. The result of this is that while key investors are not necessarily prepared to take a big risk, they are willing, for instance, to accept shorter tenancy agreements or tolerate vacancy when the product meets all their other specifications. Moreover, when it comes to prime locations in particular, the high demand and short supply have driven speculative developments into favor with more project developers. All things considered, the transaction volume could soar as high as EUR 4 billion for the year.

 

“Let’s talk logistics:” Events

  • Cargo Sous: People above ground–urban logistics below 13:00–13:50
  • Logistics: innovation and investment opportunities 14:00–14:50
  • The significance of logistics property in comparison to other classes 15:00–15:50
  • City logistics: the future of urban logistics 16:00–16:50

The above-mentioned events will take place on Wednesday, October 5, 2016 in Hall C2 at Stand 040.

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