Europe is getting out of its longest recession in 40 years, after a year and a half of economic turmoil. The Nordics outperformed the rest of Europe, thanks to less exposure to the Euro crisis. CEE countries were hit by the crisis but should pick up faster in 2014 through 2016. Economies are expected to grow between 1% and 3% between 2014 and 2016.
The investment volume in logistics assets grew by 20% in H1 2013, the largest increase since mid-2010. This brings the investment volume to EUR6.8bn in H1 2013. Two megadeals (one between Prologis and Norges, and the one signed between SEGRO and PSP) boosted the market activity. As usual, the UK, Germany, France represent more than 60% of the invested volume in Europe. Volumes were also high in Nordics, lead by a buoyant market activity in Sweden.
Private property vehicles continue to dominate as the largest share of investor type on buy side. The top 8 investors represent 20% of the total invested volume in H1 2013. This ranking welcomes new comers such as the sovereign wealth fund of Norway Norges and the Canadian institution, PSP.
No significant change has been observed in prime logistics yields in H1 2013. They ranged across Europe from below 6% in London Heathrow to above 10% in Baltics and CEE markets. On a 5 years horizon, we don’t except any significant changes in yields. Yields compression is expected to continue where they are still high, whilst in the core markets (UK and France mainly) they will move out in a modest proportion.
Source : DTZ (Groupe UGL)