Logistics is the best-performing asset class in the real estate sector: rental growth is now 6% or above across Europe and this is fuelling investor interest, delegates heard at the Let’s talk Logistics panel discussion at Expo Real on Wednesday.
'We are no longer the underclass of real estate,' said Ian Worboys, CEO of P3 Logistics Parks. 'Investors have woken up to the benefits, which are low capex, good returns and rental growth, so demand is booming.'
The numbers speak for themselves, as 15 years ago annual turnover was €1 bn a year and last year it was €30 bn, representing 11% of all commercial property investment. You do not need to have a crystal ball to predict that growth will continue, said Logan Smith, Head of Logistics BNP Paribas Real Estate: 'Europe is six to nine times underserved compared to the US, so that gives an idea of the level of growth of warehouse space that is needed to keep up with the e-commerce boom.'
It will not all be 'roses and sunshine', he warned, because technology has created many opportunities but will now present many challenges. 'It will be difficult t be ahead of the curve and foresee the impact of technology,’ he said. ‘But this is undoubtedly the most exciting time for Logistics in my 18 years in the business.'
