European warehouse investment volumes hit an all-time high of €28 bn in 2018 on the back of the e-commerce and logistics investment boom, new research from Real Capital Analytics (RCA) shows.
Logistical warehouse investments have grown by an average of 14% a year since 2013, easily outstripping the expansion in the overall real estate investment market.
According to RCA data, investments into the top 10 European markets have grown by an average of 21% per annum in the past five years, outpacing the wider market. Excluding CIC’s €12.2 bn acquisition of Logicor in 2017, last year’s volumes show a peak for European warehouse investments as a whole.
The RCA report coincides with the launch at Mipim on Tuesday of EuroLogix, an exclusive logistics industry networking event where leading players can meet and exchange views. Among those backing the event are Prologis, Tritax EuroBox, industrial real estate adviser DTRE and Oxenwood Real Estate.
Tom Leahy, senior director of EMEA at RCA, said: ‘Warehouse investment has become one of, if not the, asset of choice for many investors. Last year was a record year for investment in the Netherlands, Spain, Poland and Norway and close to a record in Germany.’
The UK remains the largest European market for warehouse investment, a position it has held for the last 10 years. A price indicator produced by RCA shows that UK warehouse prices are more than 20% above their pre-crisis peak.
However, the desire to put capital to work in the sector, driven by cyclical and structural trends in the occupier markets, has spurred investors to markedly spread their geographical focus.
Ben Bannatyne, president of Prologis Europe said: ‘The European logistics real estate market is accelerating, with the pace of change only expected to increase. Strong fundamentals, favourable market conditions and trends like urbanization and last mile logistics, are lifting markets and driving growth. On a pan-European basis for instance, net effective rents were up approximately 4.5% in 2018, a good indicator of what’s ahead and a clear sign of why warehouse investment is so attractive.’