The European logistics and industrial sector is proving itself to be a prime market for property investment, with the latest data from Jones Lang LaSalle revealing that assets maintained their momentum in the penultimate quarter of 2012. Over the three months ending September, some two billion euros (GBP 1.6 billion) of transactions took place. While this is a drop from the 2.2 billion euros registered in Q2, the fall was marginal.
Nevertheless, the reduction in transaction levels highlights the disparate nature of the market, which endured a slow first quarter in 2012 and has a limited supply of prime product. This means that year-to-date volumes were down 18 per cent on the same period in 2011. Tom Waite, associate director of European Capital Markets at Jones Lang LaSalle, stated: "There remains a polarisation in transactional activity across the region with the larger, core markets such as Germany, UK and France leading the way. Elsewhere, interest continues to increase in markets such as Poland, Benelux and the Nordics, while trading levels in key southern European countries remain subdued."
Transactions in the UK, Germany and France accounted for almost 80 per cent of total investment volumes in the third quarter, up from 71 per cent from the second quarter. According to Jones Lang LaSalle, in France and Germany activity was driven by portfolio acquisitions by Segro and Blackstone (France), and a new 100,000 square foot Amazon fulfilment centre (Germany).
Outside of these core markets, Poland and Russia are also performing well, continuing to attract strong property investment interest. Improved liquidity has helped to bolster sales, with the countries recording 77 per cent and 40 per cent increases in transaction volumes year-on-year, respectively.
However, a lack of prime product is expected to result in a slow end to 2012, although prices will remain competitive. Jones Lang LaSalle claims that full-year 2012 volumes will remain 20 per cent below 2011 levels, but the fundamentals of the sector remain strong and the market is prime for investment.
- Monday 26 November 2012