Logistics has been flavour of the month for several years now but the sector is still in growth mode and investors can find opportunities, delegates heard at Real Asset Media’s European Logistics Investment briefing, which was held at the International Investors’ Lounge at EXPO REAL last week.
‘Lower for longer interest rates are leading even more investors across the spectrum to deploy their capital in Logistics so pricing will get even sharper over the next 3 to 6 months’, said Philip Dunne, Head of Logistics EMEA, CBRE Global Investors. ‘But you can still find opportunities by partnering with good quality developers’.
Germany, the Netherlands and CEE countries have been at the heart of the Logistics boom over the last few years and continue to attract investors’ attention.
‘Germany is the driving force in Europe,’ said Robert Dobrzycki, CEO Europe, Panattoni Europe. ‘We have an established presence in CEE and have reached our limit there, so we are pursuing a pan-European strategy and see the Netherlands as the next place to grow our business. We feel it is the perfect time to expand’.
Demand is coming from investors traditionally interested in the sector, from retail investors moving their allocation to logistics and now from bond investors as well, so there is a lot of capital ready to be deployed.
‘Germany and the Netherlands are a focus for us, because 25% of GDP is still manufacturing, so there are many drivers for logistics, not just e-commerce,’ said Ingo Steves, Managing Director, Gazeley North Europe.
There are opportunities in Southern Europe as well. ‘Northern Italy is absolute value for money, but the problem is finding product,’ said Dunne.
‘There is a huge appetite for Logistics in Spain across the spectrum, from big box to urban logistics, with new players coming into the market even for smaller deals and second-tier locations,’ said Alvaro Otero, Partner, CMS Spain.
The problems virtually all European locations share is scarcity of product to buy and lack of land to develop.
‘Finding land is the main challenge,’ said Dobrzycki. ‘There are variations in different markets, but in general land is more difficult to buy, while demand from investors is strong and the markets are getting tighter’.