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More valuable than before the crisis?
The COVID-19 pandemic gave the logistics industry a brief pause, but after a short time it continued its growth path quickly and unimpressed. While there was no doubt among market experts about the systemic importance of the logistics industry even before the pandemic, the important role of logistics has now also been brought to the attention of the general public and even more investors. As a result, even more capital is to be invested in logistics real estate in the future. Last year, the transaction volume of logistics properties, at slightly less than 5 billion euros, was roughly at the level of the two previous years.
In the construction of logistics properties, however, the crisis made itself felt through delayed construction starts. Accordingly, completions of 3.7 million sq m were below the previous year's level. However, record new construction volumes are in sight for 2021 and 2022. Since 2019, momentum has also been increasing in peripheral logistics locations. Their share of the total completion volume is rising from 14% on average over many years to 20% in the current year.
In addition to the latest market trends, the study "Logistics and Real Estate 2021" focuses on the question of whether and why logistics properties are worth more now than before the crisis. In addition to higher demand on the capital market and correspondingly falling initial yields, other aspects are causing the capital values of logistics space to rise. These include rising land prices and construction costs, but also higher quality requirements by the occupiers.