European industrial investment drops 40% in Q1: JLL

Most European industrial investment markets recorded a quiet start to the year following a flurry of activity in the final quarter of 2011, according to research published by property adviser Jones Lang LaSalle. Limited availability of prime assets for sale braked investment activity to EUR 1.5 bn, down 40% on the EUR 2.5 bn volume chalked up in the same period last year.

The three largest European real estate markets (the UK, France and Germany) accounted for EUR 1.2 bn or 80% of the total volume recorded between January and end-March this year.

Most markets were relatively quiet compared to the end of 2011, with the notable exceptions of Germany and Poland which saw two large portfolio deals. As a result, Q1 volumes rose 12% in Germany year-on-year, while they were up 37% in Poland compared with a year ago.

Jones Lang LaSalle advised on 30% of the total volume transacted in the first quarter. The largest deals included the sale of the Prologis portfolio in Germany (EUR 138 mln), the sale of the Polish Prologis portfolio (EUR 100 mln), the purchase of a distribution warehouse in Werl, Germany on behalf of Rockspring (EUR 17 mln), the sale of the La Poste distribution unit in Lyon, France (EUR 22 mln) as well as the Iceland Distribution Centre in Enfield, Greater London (EUR 42 mln).

'Falling activity was the result of a lack of prime investment opportunities and sustained economic pressures continuing to restrict the availability of debt finance,' commented Penny Hacking, director, Jones Lang LaSalle European Logistics and Industrial Capital Markets. 'On a positive note, we continue to see increasing demand from a growing range of investors. Therefore we expect full-year 2012 industrial transaction volumes to remain consistent with 2011,' she added.