Logistics sector defies set-backs – rents and yields robust

The latest edition of Garbe Industrial Real Estate’s half-yearly Pyramid map – the pan-European yield and rent assessment map – has been published and, despite a series of challenges such as the war in Ukraine, supply chain disruption before and after the pandemic, interest rate increases, and inflation, it seems that the logistics real estate sector remains robust.

Both occupier and investment demand for the sector remain strong according to Tobias Kassner, head of research and member of the management board.

“The market is still very eager to invest in logistics properties. We didn’t know if it would continue this year because we faced a war in Europe, ongoing supply chain distortions and other geopolitical factors,” he told Real Asset Insight’s Richard Betts.

“When we looked at the figures for the investment transaction market we saw the first quarter of this year was very good. It began to slow in April/May but, now we have all the data collected, we see that volumes are close to the average for the last 10 years. Although it will not be a record-breaking year like 2021, it’s still a very good outlook,” Kassner said.

Rents are similarly robust it seems and Kassner points out that 70% of the markets covered by the Garbe Pyramid Map have registered substantial growth since the end of 2021 while rents were static for the remaining 30%.

“The remarkable thing is, no region reported negative rental movement,” he adds.

The Pyramid Map looks at about 120 different markets in 23 European countries, comparing rents and yields in each market and it examines the growth of these two metrics.

Please click on the video above to watch the full interview or listen to the podcast below.