Direct warehouse investment in Europe totals EUR 15bn - JLL

European direct warehousing investment totalled EUR 15bn in 2007, 12% down on 2006, but still the second strongest year on record, according to Jones Lang LaSalle's latest Distribution Warehousing Report. Volumes decreased by 35% year-on-year in the UK, Europe's largest warehousing investment market, to EUR 4.3bn.

Volumes in Germany, the largest Continental European warehousing investment market, were roughly similar to 2006. A total of EUR 2.3bn was transacted in 2007, up by just 5%. Investment transaction activity more than doubled in France to EUR 1.86bn. The Netherlands recorded investment volumes in excess of EUR 1bn for the first time last year, up by 30% year-on-year.

Aymeric de Seresin, a director in Jones Lang LaSalle's pan-European investment team specialised in distribution warehousing, commented: 'Despite the turmoil in the financial markets, 2007 was a record year for investment activity in the industrial sector in Continental Europe, with volumes up by EUR 1.3bn on 2006 to EUR 12.2bn in 2007.

'In the majority of the recently emerging markets, such as Russia or the CEE (Central and Eastern Europe) countries, the share of owner-occupier developments remains high, also limiting opportunity for investors. Whilst investor interest in those markets is increasing, the limited opportunity has driven yield levels down, minimising the risk premium within these markets and so investors remain cautious,' he added.

2007 total investment volumes were up by 50% on 2006 in Central Europe overall. In the Nordics, Sweden maintained robust investment levels of EUR 1.78bn. Decreasing investment activity was recorded in Southern Europe
(-37%) due to a near 70% decline in the Spanish market. The most significant drop in investment levels were, however, recorded in Russia, down by nearly 90% on 2006 levels, which in itself with some EUR 104mln showed a limited investment activity. This drop was due to a very limited number of investment opportunities and investor demand remains very strong.