A large yield spread, low rents and a lack of pipeline are combining to drive demand among institutional investors for logistics assets in Central Europe.
A large yield spread, low rents and a lack of pipeline are combining to drive demand among institutional investors for logistics assets in Central Europe.
A 'massive' spread between the EU-15 office yield and the Central European logistics warehouse yield is one of the drivers for investment into CEE logistics, PropertyEU's latest investment briefing on the region has heard.
The event was hosted by CBRE in London recently.
In his presentation, Jos Tromp, CBRE head of CEE research and consulting, showed a slide illustrating the point
(see attachment).
Tromp: 'Back in 2004 we had an almost 400 basis points spread. In 2007 it was only 114 bps and in 2010 it went over 300 bps again. Today, we are still looking at a spread of 265 bps so this is one of the reasons why so many investors are looking into CE warehouses, combined with the facts rents are very low in the segment and there is hardly any pipeline on the way. Most of the pipeline is still 'build-to-suit' so it is not going to influence vacancy rates much.'
