European investors turn to logistics real estate: CBRE

Investors in Europe are showing a clear shift in sentiment in favour of industrial and logistics property in 2012, according to research by property adviser CBRE.

CBRE's latest 'Real Estate Investor Intentions' survey', completed by more than 340 leading property investors, reveals that 20% of investors said industrial and logistics is the most attractive sector for purchases in 2012 compared to 13% in 2011.

The percentage change translates into the greatest growth in appetite since last year's survey across all property asset classes.

This trend is set to continue into 2012, driven by the sector's attractive income returns and resulting defensive characteristics in uncertain economic conditions, the report said.

The UK is the most attractive market in which to purchase industrial and logistics property. In 2011, overseas investors were the most active group in the UK property sector, accounting for 45% of all industrial sales, a figure boosted by Blackstone's purchase of both the Triangle and Teal portfolios for £479 mln (EUR 576 mln).

Investors are also intending to target industrial and logistics acquisitions in Germany in 2012, reflecting the influence of the strong economic performance in Germany as a driver of real estate investment opportunities.

James Markby, head of European Industrial & Logistics Investment at CBRE, said: 'A flurry of completed portfolio sales at end-2011 prompted a 12% rise year-on-year in investment activity in industrial and logistics property. We expect that logistics investment turnover volumes will be maintained in the first half of this year and potentially gather momentum over the next few years as investors recognise the relative strong income return characteristics that logistics property offers.

'Whilst constraints on the availability of debt continue to weigh heavily on real estate investment activity, we expect to see a broader pool of equity investors in the sector exploring shorter-income properties in strategic locations, taking advantage of the lack of prime assets.'