Logistics real estate has all the hallmarks of the post-crisis retail sector in the way it is drawing in billions of euros in institutional capital, PropertyEU's latest European Logistics briefing has heard.
Retail property was the investor darling following the 2008 crisis and logistics seems to be claiming that mantle today as the 'big money' in the institutional world forms alliances with logistics specialists.
Examples include Canada's Brookfield buying Gazeley to create a €2.7 bn global platform; Norway's oil-fuelled fund forming a €2.4 bn joint venture with Prologis; Canadian pension fund PSP teaming up with Segro on a €1 bn platform and and the Heatlhcare of Ontario Pension Plan doing the same with Verdion.
More recently Texas-based TPG and Canada's Ivanhoe Cambridge acquired logistics specialist P3 for €750 mln.
'These alliances give an idea of the amount of senior, institutional capital going into the logistics market. Norges and Prologis have set up huge JVs involving billions to engage in the logistics market globally and on a pan-European basis,' Damian Harrington, regional director of research, Eastern Europe at Colliers International said in the keynote presentation to the briefing held at Provada in Amsterdam.
As to why this amount of capital is flowing into logistics, Harrington commented: 'Is logistics the new retail? It's a retail derivative of sorts. We've got increasing global trades. We've got changes in supply chains and increasing decentralisation which creates buy-side opportunities. There are new markets yet to be tapped, and of course logistics has always been a good yield play relative to other real estate assets.'
CLICK HERE to watch Harrington's presentation and 19 other videos from the briefing.