Blackstone’s sale of its logistics platform Logicor to China Investment Corporation (CIC) will lift the already buoyant investment volumes in the European logistics sector to a new high this year. Based on 2016 volumes, the mega deal – the biggest ever in the European real estate industry – would account for roughly half of total investment in the segment.
That percentage will no doubt fall this year in tandem with overall investment volume growth in the segment which is expected to be significantly higher than the figure recorded last year. Investment in logistics has exploded in the past two decades at rates of between 1,150% and 2,400%, from just €1-2 bn to €25 bn in 2016. But although sheds and warehouses are now being viewed as the sexiest assets in the real estate business, they are not the only ones grabbing the spotlight.
Offices in Europe’s key capitals remain in hot demand and competition has pushed prime yields towards 3% in Paris, Munich and Berlin in Q1 2017, well below previous record lows. In Berlin, the prime office yield now stands 175 basis points below its previous peak of 4.75% in Q4 2006.
The Amsterdam office market is likewise set to see further yield compression and rental growth on the back of continuing strong economic recovery in the Netherlands, delegates heard at PropertyEU’s Dutch Investment Opportunities briefing which was held at the Provada real estate fair in the Dutch capital in late May.
A week earlier, delegates at another PropertyEU briefing in London heard that real estate investment in the Nordic countries is expected to beat last year’s record in 2017 as target allocations are set to increase further.
‘Investments in real estate in the Nordics almost reached the €35 bn mark in 2016, making it a record year,’ said Tom Leahy, director EMEA at Real Capital Analytics (RCA).
Records are also being broken in Central and Eastern Europe, according to new data from Colliers International. The Czech Republic and Hungary were the top real estate investment destinations in the region in the first quarter of this year with volumes rising 70% year-on-year, the advisor said.
And a new dawn is breaking in Iberia, as good economic fundamentals and strong government support attract a new wave of investors to the Spanish and Portuguese real estate markets, PropertyEU’s Iberia Investment Briefing in London heard. ‘The year has started on a high note in both countries,’ said Reno Cardiff, international partner and head of CMG business space at C&W Spain. ‘Growth has been exponential, with Iberia increasing its share as a percentage of transactions in Europe from 1% to 5%.’
