German logistics investment picks up in 2012: BNP Paribas RE

German logistics and light industrial property investment totalled EUR 851 mln in the first half of 2012, almost double the comparable year-earlier result (EUR 470 mln), according to research conducted by BNP Paribas Real Estate (BNPPRE).

'Portfolio sales, which had dominated market activity in the first quarter, now represent only 28% of turnover, whereas single deals have increased considerably and account for 72%. Over half of this comprises transactions of between EUR 20 and 90 mln,' said Hans-Jürgen Hoffmann, head of industrial investment & services at BNP Paribas Real Estate.

The key German logistics centres have also benefited from the upward trend, increasing their combined transaction volume by 18% to EUR 256 mln. The only markets posting a lower turnover than in the first half of 2011 were Berlin (- 62%) and Munich (-54%).

Special-purpose funds headed the group of investors, with a share of more than 32% of turnover. In second place, with over 22%, came corporate investors.

The lion's share of the capital deployed in the logistics investment market came from German investors. In all, they generated over 63% of the transaction volume and 76% of single asset deals.

In the first half of this year, prime yields remained unchanged, maintaining their end-of-2011 level. The list continues to be headed by Frankfurt, with a net initial yield of 6.5%. Yields in Hamburg and Munich stood at 6.6%. The figure in both Düsseldorf and Cologne is 6%, putting them just ahead of Berlin, with 6.85%. The most favourably priced logistics location is still Leipzig, where the net initial yield is 7.1%. Across the major locations, the prime yield averaged out at 6.75%, which is slightly lower than the average of the past seven years.