French prime logistics yields dip below 4%

Prime yields for logistics investments in France have dipped below 4% this year for the first time, says Romain Nicolle, head of logistics capital markets at Cushman & Wakefield.

‘We have a shortage of supply for occupiers in France, this is the main issue,’ Nicolle told PropertyEU at Expo Real in Munich.

‘After years of no rental growth we are seeing rents rising by 10% or more in locations where the vacancy rates are only 2%-3%, such as Lyon and Marseilles as well as parts of greater Paris.’

These trends make French logistics attractive to investors, he said. ‘France is also a step behind the UK or the US in terms of internet penetration so in future there will be strong occupier demand.’

The sale-and-leaseback of Amazon’s XXL fulfilment centre south of Paris at Brétigny-sur-Orge, part of the three-asset Neptune portfolio which the retailer sold this year, was below 4%.

In Gonesse, 17 km north east of Paris, a 25,000 m2 prime distribution centre let to GL Events has also just transacted at below 4% and there are other transactions at this level in the pipeline around the capital.

The rent at the Gonesse warehouse is €70 per m2 per year, while prime rents in Lyon and Marseille had risen to €50 per m2 per year, from the mid €40s a year ago, Nicolle said..

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