In the third quarter of 2015 the transaction volume for logistics and industrial properties recorded a slowdown compared to the extremely strong third quarter of 2014. Almost € 2.2 bn were invested into logistics and industrial properties throughout the first nine months of the year which marks a 22% decrease year-on-year. The volume over 12 months likewise dropped quarter-on-quarter by 6% to circa € 2.9 bn. “The interest in German logistics properties continues to be strong. The decrease in the transaction volume rather reflects the lack of investment product than a declining demand.””, says Bertrand Ehm, Director Industrial Investment at Savills.

In fact, the demand for this class of asset increased throughout the year. “We are seeing ever more new investors showing interest in logistics properties. On the one hand this down to increasingly high pressure to invest, making investors look towards asset classes outside their initial focus. On the other hand they are confident of a positive outlook for logistics properties given the growing e commerce sector”, states Ingo Spangenberg, Director Industrial Investment at Savills. The strong demand for logistics and industrial properties in Germany is based upon the continuously strong occupier demand for modern space as well as Germany’s appeal as a central logistics location in Europe. This especially attracts foreign buyers who accounted for over two thirds of the transaction volume in the first three quarters of 2015.

However, the strong demand has been facing limited supply so far which makes investors broaden their search profile within the logistics and industrial property sector. “In 2015 investors are increasingly interested in existing properties, cross-docks and light industrial facilities, with increasing demand noticed for multi-tenant properties”, establishes Spangenberg. In consequence, the transaction volume of industrial properties bucked the trend of logistics properties and rose by 18% year-on-year. “Nonetheless the investors most notably continue to focus on properties that meet the requirements of e-commerce”, continues Spangenberg. “Looking ahead, the demand for logistics and industrial properties is expected to remain strong”, forecasts Andreas Wende, COO and Head of Investment Germany at Savills and explains: “Driven by the occupiers, the network of logistics properties is getting increasingly dense so that the investors will broaden their radius.”

Industrial and logistics investment market Germany Q1-Q3 2015 (JPG)