After teaming up with logistics developers in the UK, France and Spain, CBRE Global Investors is now eyeing other European markets, the company’s head of logistics EMEA Philip Dunne (pictured right) has told EuroProperty.
‘It would be great to do something similar in Germany and replicate that model,’ says Dunne. There are a number of potential partners in that market, he adds, but no talks are currently being held. ‘There haven’t been that many transactions in Germany, but we would certainly like to replicate our value-add strategy there.’
Dunne was speaking following the announcement in early December that CBRE GI had teamed up with privately-owned French logistics developer Virtuo.
Dunne notes: ‘We continue to look at acquisition opportunities, but good quality under-leased products with asset management opportunities are very hard to find. I think it’s fair to say that the major platform deals have been done and that there are not many portfolio deals around.’
Italy is also a target. ‘Notwithstanding the political turmoil in the country, we would like to do more in the greater Milan area,’ says Dunne. ‘It is one of the last mature markets where the pricing spread is at a reasonable level and there is at least supply.
‘Demand has recovered, which is causing rents to stabilise and even increase and it is a market where it is possible to get good returns with the right product in the right locations.’ He adds that CBRE GI would also like to do more in Italy via straightforward acquisition and Bologna and Rome are two other cities in which it is interested.
The Nordics, particularly Sweden, are also on Dunne’s list: ‘We would love to do more in Sweden, but it is a difficult market to penetrate and extremely expensive.’
CEE countries Poland, Czech Republic and Slovakia are all targets too. ‘We are pursuing opportunities via a mix of forward-funding opportunities and sharing the development or leasing risk and are hoping to create more scale there. There are a large number of high-quality niche developers, but relationships are very important and it is necessary to take a long-term view to respond to the opportunities.’
Dunne says that in the current market, there is no discount for taking a leasing risk or forward funding a project. ‘In the past it was possible to obtain a discount of 25-50 basis points on a forward-funding project and a similar discount on a leasing risk, but that’s not there now.’
This story was first published in PropertyEU's sister publication EuroProperty, where the full article is available.
