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9M volumes break €10 billion, already 16% higher on FY 2012
London, 6 December, 2013 – Momentum in European logistics and industrial real estate investment continued in Q3 2013 when more than €4 billion was invested - second only in volume to the exceptional Q2 2006 (€5.6 billion). As a result, 9M 2013 investment volumes, at over €10 billion, were a substantial 73% ahead on the equivalent period last year and also 16% higher than 2012 full-year volumes.
• Direct investment volumes reached €10.2 billion in 9M 2013, a 73% increase on the equivalent period last year• All regions recorded increased investment activity YoY in the year-to-date• Further prime yield compression in a number of major markets• Full year 2013 investment in logistics and industrial assets expected to reach between €14-15 billion.
Rising levels of investor confidence as the world economy regains some vigour, coupled with intensified competition from a wider range of investors meant Jones Lang LaSalle has adjusted its projected transaction volumes for the full year to exceed €14 billion, the highest volume since 2007.
“We continue to see growth in transactional activity and investor appetite in the sector. Several factors are driving this, most notably the weight of money targeting core and emerging markets, improving property fundamentals in many markets and a slow increase in available opportunities. The sharp spike in investment volumes is being driven by the demand for large lot sizes and portfolio transactions.” says Tom Waite, Director, European Capital Markets, Jones Lang LaSalle.
“Investors are attracted by the sector’s robust income return and growth opportunities based on current strong demand and supply dynamics in the occupational market” he adds.
Investment continued to expand in the UK (+35%; €3.1 billion) and Germany (+26%; €1.6 billion) whilst declining a modest 5% in France (€0.9 billion).
Meanwhile, capital continued to spread to a greater breadth of geographies in Q3 2013 and transaction growth in smaller markets picked up in Southern Europe. Volumes already more than doubled over 2012 as a whole in Russia in 9M 2013 to €770 million whilst an €155 million injection in CEE markets in Q3 meant 9M volumes rose 30% year-on-year.
“With e-commerce at front of mind for many retailers, we continue to see strong appetite for logistics and industrial assets as investors look to expand their exposure in the sector to diversify their portfolios. This is in part driven by a structural shift in the logistics market that continues to support the sector developing into an established real estate investment market – around two thirds of the invested capital in the year-to-date went into logistics assets” comments Alexandra Tornow, Associate Director, EMEA Logistics & Industrial Research, Jones Lang LaSalle.
“Investors are also increasingly prepared to take more risk, in particular with pricing continuing to tighten in the core markets. We expect to see more opportunistic transactions over the coming quarters along with a continued spread into smaller markets” she adds.
Further yield compression for prime logistics assets was recorded in Q3 2013 in markets across Germany (-15bps), France (between -5bps to -10bps), Dublin (-25bps) and select UK regions (-25 bps).
Logistics & investment commercial real estate investment volumes for Europe, Middle East & Africa
Source: Jones Lang LaSalle
Our investment market analysis is based on the whole European region and includes transactions >EUR 3.5 million (US $5million).
About Jones Lang LaSalleJones Lang LaSalle (NYSE:JLL) is a professional services and investment management firm offering specialized real estate services to clients seeking increased value by owning, occupying and investing in real estate. With annual revenue of $3.9 billion, Jones Lang LaSalle operates in 70 countries from more than 1,000 locations worldwide. On behalf of its clients, the firm provides management and real estate outsourcing services to a property portfolio of 242 million square meters and completed $63 billion in sales, acquisitions and finance transactions in 2012. Its investment management business, LaSalle Investment Management, has $46.7 billion of real estate assets under management.In Russia and CIS Jones Lang LaSalle have offices in Moscow, St. Petersburg and Kiev. Jones Lang LaSalle, Russia was voted Consultant of the Year in 2004, 2006, 2007, 2008, 2009, 2010, 2011, 2012 and 2013 at the Commercial Real Estate Awards, Moscow and Consultant of the Year at the Commercial Real Estate Awards 2009, St. Petersburg. For further information, please visit www.jll.ru
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