The strength and importance of the logistics sector will emerge reinforced from the current crisis, experts agreed at Real Asset Media’s European Logistics Investment Briefing this week, an online event attended by 300 participants from 27 different countries.
‘Our view is that logistics is the most resistant asset class,’ said Robert Dobrzycki, CEO, Panattoni Europe. ‘Next year, when the dust settles, there will be a substantial re-direction of capital towards our asset class, which will be very positive for the sector. Banks feel the same way’.
Many feel they are under-invested and will seek to deploy more capital in logistics, as the sector’s resilience and importance has been highlighted by the coronavirus pandemic and the shift to online shopping.
‘There will be a lot of demand for logistics when this is over,’ said Stephan Riechers, Senior Investment Manager Logistik, Union Investment Real Estate. ‘Institutions will seek to reallocate capital into logistics and away from other sectors like hotels or retail’.
Investors from all over the world are already dipping their toe in the water, even if the recovery is not in sight yet.
‘Fund-raisers in logistics are doing a great job, we see interest from the likes of Blackstone and others in the US but also from Asia’, said Ingo Steves, Managing Director, Gazeley North Europe. ‘There is a strong belief in logistics as an asset class’.
The current climate of uncertainty and low liquidity is pushing valuations down, but it is a temporary situation and prices will rise again as soon as there is some light at the end of the tunnel, experts agreed.
‘Equity buyers are being pickier, debt is more expensive and the investor pool is smaller now, but when the rebound comes it could take us even beyond pre-COVID-19 levels,’ said Marcus de Minckwitz, Director, Omnichannel Group, Savills.
‘The fundamental strength of the asset class might not be recognised yet, but next year pricing will return to pre-coronavirus levels,’ said Dobrzycki. ‘My advice would be don’t sell now unless you really have to’.