After a good start to the year, industrial and logistics investment in Europe slowed in the second quarter with total volume for the first six months steady year-on-year at €10.9 bn, according to figures from BNP Paribas Real Estate.
The UK weighed down the overall volume with a decline of 13%, but mainland Europe was resilient with increases across the board. France turned in the strongest growth over the first six months with a rise of 27%. Prime yields reached 5.7% in Greater Paris and a further contraction is expected by the year-end.
Germany also performed well with 18% growth in investment and demand is expected to remain strong in the rest of the year. While France saw a decline in take-up over the first six months, Germany turned in a strong start to the year with a rise of 6%. New speculative developments are not enough to offset the lack of new supply, the advisor said.
While most leading European cities saw prime rents stabilise or decline during the second quarter, Berlin reported a rise of 4% while Munich posted 2% growth. By contrast, rents in Paris, Birmingham, Madrid and Warsaw were flat.
Warsaw saw the largest contraction of prime yields in Q2 compared to the year-earlier period, of 150 basis points (bps). This compares to contractions of 100 bps in Madrid; 65 bps in Paris; 50 bps in Milan; 40 bps in Amsterdam; 35 bps in Munich; and 25 bps in both Berlin and Prague.
