Record Levels Of Investment For European Industrial And Logistics In H1 2016
Dublin 2nd September 2016 – The European industrial and logistics investment market experienced a record breaking amount of investment volumes in H1 2016, despite a slower Q2, according to the latest CBRE Industrial and Logistics MarketView.
Lower than average activity in the UK amidst Brexit uncertainty meant logistics assets only made up 45 per cent of total turnover, instead of the usual 60 per cent, but the first half performance highlights the importance of this asset class .
According to the research, occupier demand held up well in H1 2016, despite a slowdown in activity during Q2, which in some markets, including the Netherlands, was quite pronounced. Other core markets performed strongly including Germany, Italy, Ireland, the Czech Republic and the UK. Net absorption throughout Europe has remained positive, pushing vacancy rates down to a weighted 5.5%. In addition, many of these leading areas lack availability for modern warehouses or city depots, which has resulted in strong development activity and an increased share of speculative development in the areas, giving a further boost to said markets.
Prime yields declined further in Q2, led primarily by Germany, France and Spain. Ahead of the Brexit vote, prime yields appeared to bottom out entirely, but a renewed downward pressure on interest rates is likely to reverse this effect. Nonetheless, investors are growing to be more risk averse, which is beginning to impact secondary values.
We have witnessed consistent occupier activity in the Irish industrial and logistics property market with a number of considerable active Dublin based requirements which will be satisfied via the build-to-suit route. That said take-up during Q2 2016 and indeed in H1 2016 has been somewhat lower than the record volumes of activity achieved in the same period last year. This is reflective of a severe scarcity of modern accommodation in core locations, as opposed to a weakening in demand levels. Appetite for quality investment opportunities remains strong although supply is still very constrained, particularly for larger lot sizes.
About CBRE Group, Inc.
CBRE Group, Inc. (NYSE:CBG), a Fortune 500 and S&P 500 company headquartered in Los Angeles, is the world’s largest commercial real estate services and investment firm (based on 2016 revenue). The company has more than 75,000 employees (excluding affiliates), and serves real estate investors and occupiers through approximately 450 offices (excluding affiliates) worldwide. CBRE offers a broad range of integrated services, including facilities, transaction and project management; property management; investment management; appraisal and valuation; property leasing; strategic consulting; property sales; mortgage services and development services. Please visit our website at www.cbre.com.
In Ireland, with offices in Dublin and Belfast, CBRE is the country’s largest commercial real estate services company, now employing over 165 employees and offering a full range of property services including property sales and acquisitions, leasing and management, investment, corporate services, debt advisory, project management, consultancy, business rates and compulsory purchase, valuations and research. Please visit our website at www.cbre.ie or www.cbre.ie/ni.