German logistics investment set to equal last year’s €5.4bn

Germany’s logistics investment market has not been adversely affected by the coronavirus pandemic and during the first half of the year attracted nearly €2.7 billion, up 80 % over on the prior year according to a survey from Bulweingesa.

The total invested in pure logistics and warehouse properties in 2019 was €5.4 billion and the firm says it safe to expect a year end investment total at least on the same level. The total invested in the more widely defined logistics and industrial space totalled €9 billion.

Unlike retail or hotel properties, logistics real estate is among the winners of the coronavirus crisis having been highlighted as “an essential industry”, says Bulweingesa.

The total floorspace of recently completed purely logistics accommodation has also set a new record with 4.9 million sq m. Meanwhile, demand for new-build facilities amounts to 6.5 to 7.0 million sq m  and exceeds available supply.

Although price growth lost some of its momentum this year yields are in the range 3.7% to 6.8%, depending on location.

Logistics construction at all time high

Andreas Schulten of Bulwiengesa, said: “Based on the projects currently under construction, we anticipate more than 5 million sq m of new-build accommodation in 2020 – which is a new all-time high. The actions of property developers and investors reveal their optimism as they assume that the demand for logistics facilities will keep going up.”

He added that the coronavirus pandemic, has shown that logistics is “the lifeline of our national economy”.

The top-5 list of the most active logistics property developers between 2015 and 2020 is led by Goodman Group (1.9million sq m), followed by Panattoni (1.2m sq m) and the VGP Group (around 950,000 sq m). Dietz (around 900,000 sq m) and GARBE Group (around 700,000 sq m), respectively were in fourth and fifth place.