BNP Paribas Real Estate publishes data on the logistics investment market for Q1 2024

Year-on-year increase in turnover and most important pillar in the portfolio segment

After market activity on the logistics investment market was very lively in the second half of 2023 in particular, the logistics segment started 2024 with a transaction volume of around €1.4 billion in the first quarter, which was not above average (-22%), but nevertheless with good turnover (+48% compared to Q1 2023). This is the result of an analysis by BNP Paribas Real Estate.

Among the top property types, logistics investments ranked behind the retail sector (36%) at the start of the year with a market share of just over a quarter, but well ahead of office properties (16%). Looking exclusively at the portfolio segment, logistics portfolios clearly dominate investment activity in this sector with €647 million (57% of the nationwide volume) compared to other asset classes.

"However, the improved market sentiment compared to the first quarter of 2023 is not only reflected in the transaction volume, but also in the number of deals, which also increased by 38%," explains Christopher Raabe, Managing Director and Head of Logistics & Industrial at BNP Paribas Real Estate GmbH.

The lively market activity is supported by the fact that all signs currently indicate that the pricing phase appears to be coming to an end. Accordingly, there were no further adjustments to the net prime yields in the first quarter. This means that the A-locations are still quoted at 4.25 %, while the figure for Leipzig is 4.45 %.  

Turnover focus: away from the A cities, but from € 100 million upwards

The top markets have only made a small contribution to the good start to the year on the logistics investment market in the first quarter: at just under €288 million, the eight largest German logistics agglomerations accounted for only 20% of total take-up in the first three months. Against this backdrop, it comes as no surprise that investment activity in the top locations at the start of the year only took place in the small-scale segment up to €50 million.

Nevertheless, individual deals with a volume of over €100 million (54%) were realised in the portfolio segment between January and April. These primarily included the sale of four VGP parks and a portfolio of six properties (two of which were in the Netherlands), which was sold by Blackstone to Clarion.  

Prospects

The logistics investment market was able to carry the momentum from the second half of 2023 into the first quarter and record a good result in view of the persistently challenging conditions.

Particularly in light of the fact that many transactions, some of them large, were still finalised at the end of 2023, it is not surprising that the interim result after the first three months was not even closer to the long-term average.

Last but not least, the good number of deals overall underlines the impression that the upward trend seen in recent quarters is likely to continue, even outside of the larger sales drivers and portfolios in the triple-digit million segment.

In addition, logistics investments have repeatedly confirmed their good positioning in the asset class comparison and in the favour of investors over the last twelve months, particularly in comparison to office investments.

"The now much less dynamic pricing processes are also having a favourable effect on lively market activity. The prospect of sustainably stabilising prime yields has a positive impact on investors' planning security and willingness to invest," says Christopher Raabe.

Link to the market report:

https://www.realestate.bnpparibas.de/marktberichte/logistik-investmentmarkt/deutschland-at-a-glance

Press contact:
Chantal Schaum - Tel: +49 (0)69-298 99-948, Mobile: +49 (0)174-903 85 77, chantal.schaum@bnpparibas.com
Viktoria Gomolka - Tel: +49 (0)69-298 99-946, Mobile: +49 (0)173-968 60 86, viktoria.gomolka@bnpparibas.com

About BNP Paribas Real Estate

BNP Paribas Real Estate is a leading international property services provider that offers its clients comprehensive services in all phases of the property cycle: Transaction, Consulting, Valuation, Property Management, Investment Management and Property Development. With 5,000 employees, the company supports owners, tenants, investors and the public sector in their projects thanks to local expertise in 24 countries (own locations and alliance partners) in Europe, the Middle East and Asia. BNP Paribas Real Estate is part of the BNP Paribas Group, a leading global financial services provider.

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