Still positive on logistics but increased caution required

BNP Paribas REIM UK has not changed its view on the logistics sector over the last six months despite the changing economic environment.

“We’ve adapted to the new market factors but we’re still bullish on this asset class,” said Benoît de la Boulaye, Head of BNP Paribas REIM UK.

Talking to Real Asset Media recently he said that in terms of geography he is slightly more bullish on the UK but that there is still a great appetite for continental Europe.

“We’ve adapted our approach basically to the new factors. We have to include in our business plan interest rate increases and the cost of debt. Inflation has different impacts,” he explained.

This has made the firm more cautious on the terms of indexation and how indexation clauses work. “We are a bit more cautious or detailed on how the indexation clause would work within each lease, how long would be the lease and our capacity to capture rental growth.”

And there is more caution regarding potential developments. “When buying spec or development plays, the strength of the developer is something that we will maybe be a bit more cautious about than we were six months ago,” he added.

Click on the video to watch the full interview or listen to the podcast below.