Investments in logistics real estate continue to be as popular as ever even in corona times, setting an all-time record: in the first three quarters of 2020, 34 per cent more was invested.
For now, the corona crisis seems to have less impact on the overall real estate market than expected. A decline of 25 to 35 per cent is forecast for the whole of 2020. That is a significant drop, but one that is less severe than initially expected, says real estate specialist CBRE. That windfall is due to hefty investments in logistics property. 1.9 billion euros was invested in logistics and industrial real estate in the first three quarters, up 34 per cent on the same period last year (1.5 billion euros).
A historic record, says CBRE in its Mid-Year Market Outlook, logistics property investment volume is expected to reach between €3 billion and €3.5 billion this year, up from €2.5 billion in 2019.
The record volume of investments in logistics real estate is due to strong investor confidence in the sector and a number of large portfolio transactions. "In these troubled times, logistics real estate represents a stable and safe investment sector due to its relatively stable rental income and favourable prospects," explained Jim Orsel, director of logistics real estate at CBRE.
Rental prices
The slumping trade volumes do cause most logistics tenants to wait and see and not move or expand. This is especially true for tenants from heavily-affected sectors, such as retail and automotive. According to CBRE, many speculative developments have been put on hold as a result; no construction will take place until a tenant or buyer is in sight. As a result, vacancy rates will increase to a limited extent.
The property organisation expects rents to remain stable in the coming period. The market remains in balance due to the rising share of e-commerce, according to CBRE. “Due to the coronavirus, the
share of e-commerce
is growing faster than expected, and
more stock is being built up.
As a result, there will be
term.”
