Investors pick up €6b of European industrial assets in Q2

Investors forked out a record €6.1 bn to acquire European industrial and logistics property in the second quarter of 2015, CBRE has revealed.

The capital was concentrated on north-western Europe, with the UK accounting for 40% of the total volume. Germany, Sweden, Finland, the Netherlands and Spain also reported strong quarterly figures.

Continuing the trend seen throughout the year, occupiers of industrial properties were predominantly third-party logistics providers (3PLs) or retailers. They were, in turn, driven by high levels of private consumption and exports from the eurozone.

CBRE noted that the occupiers' market is strengthening across Europe: the Netherlands experienced record-high H1 take-up volumes, as well as a strong development pipeline. Germany, France and the UK all reported robust growth rates, on the back of a strong Q1. The automotive sector is experiencing high levels of interest in the Central and Eastern European markets.

But rental growth remained modest in the quarter, and was mainly concentrated in the UK and Ireland. From a yield perspective, markets that have traditionally seen higher yields such as France, Italy and Central Europe saw a contraction over the quarter. The weighted average yield for EMEA has now dropped below 7% and in many markets previous lows have been reached or overtaken.

Comment
Amaury Gariel, managing director of CBRE's EMEA Industrial & Logistics business, said: 'Growing occupier demand and strong investor activity has meant that a rising development pipeline will now progress across Europe. Specifically, a number of Czech, Polish and Dutch hubs saw the creation of a strong pipeline in H1.

'However, in the UK and Ireland the development potential in key locations appears to be insufficient to cope with demand, particularly when taking into account the specific needs of occupiers inclusive of size, configuration and location. As the sector continues to go from strength to strength, with strong drivers for demand which remain high; we expect to see investor appetite sustain the high levels seen in this quarter.'