European industrial real estate investment rebounds in Q2 2012

European logistics real estate investment made up ground in the second quarter of 2012 when EUR 2.2 bn was invested in logistics and industrial assets, according to the latest data from Jones Lang LaSalle. The result reflects a 56% increase compared to the relatively slow first quarter.

Nevertheless, half year volumes were still down 20% on the equivalent period last year (H1 2011).

'Although the European logistics and industrial market has continued to face headwinds from the re-emergence of Eurozone market strains, there is still strong investor interest in core, income producing investment opportunities in the major markets. This is reflected in volumes being up 45% on H1 2008 during the first six months of this year,' noted notes Chris Staveley, director of European logistics and industrial capital markets at Jones Lang LaSalle.

The share of the UK and Germany as Europe’s two leading markets increased to 65% in H1 2012 compared with just over 50% in 2011 as a whole, with Germany leading the advance. Both markets saw increased investment activity in the first six months 2012 compared with H1 2011 - volumes were up by 4% in the UK and a strong 63% in Germany. Elsewhere in Europe, half-year 2012 volumes rose in France (+14%), Poland (+43) and Russia (+40%) compared to H1 2011, but weakened across all other markets.

'Investors continued to express interest in the Benelux, the Nordics and the main CEE markets, but a lack of core, stabilised product in these markets has been the main reason for subdued activity throughout the first six months of 2012. On the other hand, caution continuous to prevail for Southern European markets,' Staveley said.

International investors continued to show strong appetite for European logistics and industrial assets. International capital targeting this asset class exceeded EUR 1 bn in the first half of 2012, marking the second strongest investor group behind UK investors. The majority of international capital was invested in the UK (60% of the total international capital) and Germany (20%), reflecting the groups preference for core product in prime locations.