Reaching unprecedented heights doesn’t mean that you cannot climb even further: such seems to be the confident mood in the Logistics sector. After years of record growth there is more growth ahead, experts agreed at Real Asset Media’s Logistics Investment Briefing, which was held at MIPIM.
‘We are at historical highs and it looks like this year will be even better than last year,’ said Robert Dobrzycki, Chief Executive Officer Europe, Panattoni. ‘We have never had these volumes in Europe before. We continue to expand and our market is performing better than the economies of the Continent. It is a tight market, but the performance is phenomenal’.
In another record-breaking year, vacancy rates have gone down across the Continent, demand has gone up and there are no signs of a slowdown.
‘All the big names have had record years, but actually we believe this is going to continue for some time yet in Europe, because we have only seen the tip of the iceberg,’ said Kevin Mofid, Director Research, Savills.
‘We see the momentum really continuing,’ agreed Joseph Ghazal, Managing Director, Chief Investment Officer, Prologis Europe. ‘Our investors are actually increasing their allocations to logistics real estate and the challenge for them is finding the right product in the right market. The markets are tight, but the demand is extremely healthy everywhere in Europe, even in the UK’.
The UK has the most developed e-commerce market in Europe, while other countries are just discovering the joys of online shopping. Online sales are a big driver of logistics but not the only one, said Ghazal: ‘We shouldn’t forget the typical big-box customers. Even now 60-70% of our leasing is done for non-online customers’.
Whether it is traditional industrial demand or e-commerce needs, companies in the logistics sector are seeking to grow and looking to buy or develop across the Continent. ‘We are the most active players on the development side in Europe and our plan is to continue expanding into Western Europe as well’, said Dobrzycki.
Looking ahead, Prologis is also in expansion mode, said Ghazal: ‘We’re actively buying in all the 12 countries that we are in, snapping up anything from core to value-add, obviously with different return expectations. But we keep looking for any opportunity, including last mile’.
Growth rates have been such that veterans of the sector sometimes still have to pinch themselves. ‘I consider myself a kind of digital and e-commerce native, as I have been in this sector for 20 years, first at Amazon and then Zalando,’ said Raimund Paetzmann, Vice President Corporate Real Estate, Zalando. ‘But now is a really exciting time to be in logistics’.
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