US buyers boost European logistics market

US investors were the main driving force behind the European logistics market last year, accounting for nearly one-third of all transactions in 2012, according to a new report published by Colliers International.

With over €3.5 bn worth of industrial and logistics acquisitions, they were by far the largest group of cross-border buyers in Europe, targeting mainly UK property. In total, there were €12 bn of logistics deals in the EMEA region in 2012.

The UK retained its status as the most liquid logistics investment market in Europe (43% of total investment) followed by Germany and France. 2012 was also notable for European logistics investment as Norway’s sovereign wealth fund made its first acquisition in the sector – purchasing half of a portfolio through a joint venture with Prologis.

Erik Barnekow, EMEA Industrial and Logistics team leader at Colliers International, said the industrial and logistics market is expected to remain stable this year. 'With hardly any speculative development in the pipeline, the market will continue to be characterised by the supply-demand imbalance. Pre-lease agreements and build-to-suit projects will constitute significant market share.'

Prime rents remain broadly unchanged across the majority of markets. A further decrease of rents took place in Southern Europe, where demand was restrained by poor economic performance.

Core Western European markets continued to record relatively healthy demand levels, while in Eastern Europe, Russia and Poland dominated the market again. The largest transactions in the region were signed by retailers Leroy Merlin in Poland and Adidas in Russia.

'With little investable new stock expected to come onto the market from development, opportunities will mainly arise from investors disposing of non-strategic assets or assets that have come to maturity within their portfolios,' said Barnekow.