Logistics Slowdown Affects Investment Market
New logistics developments slowing down will also have it’s consequences on the investment market, as this is already limiting the amount of investment opportunities in the market. In time, this will have a limiting effect on the total investment volume as well.
In recent quarters, the total investment volume in logistics real estate was already significantly lower compared to prior quarters. This was however, less related to a scarcity of investment opportunities. Due to increases in deposit rates from central banks which followed in rapid succession, pricing for real estate in general became uncertain, with sellers and buyers having different expectations in terms of pricing. This has lead to numerous deals being postponed or cancelled. As such, the total investment volume in Q1 2023 accounted for ‘only’ € 550 million, down 63% compared to Q1 2022.
When the logistics investment market will pick up momentum again, will largely depend on stability in financial markets. This is likely to occur in the second half of 2023, as inflation is then expected to slow down. Currently, GIY for prime logistics real estate stands at 5.0%. This up 150 bps since the lowest point in the first quarter of 2022, correcting faster than most other asset types.
Alle inhoud © copyright 2021 Savills. Alle rechten zijn voorbehouden. Savills Nederland Holding B.V., opgericht en geregistreerd in Nederland. Gevestigd: Claude Debussylaan 48, 1082MD Amsterdam. KvK nummer: 33202244.