Investment market update
Investment market profiting from robust demand for logistics property
Thanks to these robust fundamentals of the logistics occupier market, the sector has once again enjoyed strong investor appetite.
In the first six months of 2022, nearly €3 billion was invested in logistics property: 18% more than the same period last year. The first quarter, having a €1.7 billion investment volume, proved particularly strong. British Tritax EuroBox, for example, purchased a logistics building in Roosendaal from Logistics Capital Partners for over €144 million early this year.
Headwinds increasing due to inflation and rising interest rates
The logistics market, however, is also showing the first signs of increased economic and geopolitical uncertainty. Inflation rose to 12% in August. 2 Little by little, the question increasingly arises: how much longer will occupiers be willing and able to pay these high rents? Surging operational costs are an increasing challenge for logistics occupiers.
Investors are also taking a more critical stance:
price negotiations are more commonly taking place, sometimes resulting in deferred transactions. There is a valid reason for this critical stance: interest rates are soaring, while initial yields have fallen sharply in recent years. Add to that the sharply increased land prices and building costs, and the problem facing investors becomes clear: finding a financially viable project is becoming increasingly challenging.
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