BNP Paribas Real Estate publishes data on the logistics investment market for Q4 2022 - Logistics investment market breaks through the €10 billion mark for the first time

Frankfurt am Main, 9 January 2023 - The logistics investment market ended the year where it began at the end of the first quarter: With a record result of just over €10.1 billion, surpassing the €10 billion mark for the first time and thus just above the already excellent previous year's figure (+3%). This is the result of an analysis by BNP Paribas Real Estate.

"With this result, logistics investments have also moved ahead of the retail sector (17%) and behind the office sector (41%) to second place in the asset class ranking for the second time in a row, with a 19% share of turnover in the commercial investment market. However, the figures conceal developments that are indicative of the changed conditions over the course of the year in terms of the interest rate environment and the uncertain geopolitical situation. As a result, the increase in revenue compared to the same period of the previous year has fallen noticeably from a 133% increase in the strong first quarter to a mere 3% higher result for 2022 as a whole," explains Christopher Raabe, Managing Director and Head of Logistics & Industrial at BNP Paribas Real Estate GmbH. In terms of the two segments of individual (€5.4 billion) and portfolio deals (€4.7 billion), a balanced ratio of just under 54% and around 46% of the volume respectively can be seen. Package sales were more extensive (+ 26 %) and individual transactions were slightly less involved in investment activity (- 12 %) than in 2021.

The major locations accounted for around € 2 billion in 2022 as a whole, which corresponds to a comparable result to the previous year. At the level of the individual logistics hubs, the locations with increases and decreases in turnover balance each other out. It is also worth noting that, at a good 80% of turnover, a very high volume can once again be found outside the top markets. The most decisive driver among the major logistics regions was the capital city of Berlin, which took the lead with a volume of € 512 million. Over € 250 million was also invested in Frankfurt (€ 401 million), Munich (€ 301 million), Hamburg (€ 299 million) and Leipzig (€ 258 million). By contrast, Düsseldorf (€112 million), Stuttgart (€97 million) and Cologne (€18 million) fell below the €250 million mark.

Portfolios and big deals: large transactions in the lead

The numerous large-volume portfolios and some big tickets in the individual transactions once again led to a considerable turnover in the €100m+ category (€4.9bn; 49% share). However, an exceptional result can also be reported in the segment of sales between € 50 million and € 100 million, which at a good € 2.2 billion accounts for a share of almost 22 %. Sales of up to €50 million also account for a further 29%.  

Specialist funds and property companies dominate

Accounting for a good 50% of the overall result, half of the logistics investment volume at the end of the year was attributable to two investor groups, both of which achieved top results. These include special funds, which accounted for almost 31% of turnover, ahead of property AGs/REITs (just under 20%). It is worth noting in this context that the investment structure of the two investor groups is completely different: While Immobilien AGs/REITs were particularly active in the portfolio segment, special funds are the most important buyers in the single deal segment. Investment/asset managers, equity/real estate funds and project developers also accounted for double-digit percentages (around 11% each). The activity of project developers in particular emphasises the high attractiveness of the still booming user markets, as they are constantly initiating and selling new projects.

National and cross-border deals balanced

After the market for logistics investments was initially firmly in the hands of international investors in the middle of the year, German investors actively participated in the market in the second half of the year and broke through the 50% mark (just under 52%). They accounted for a good € 5.2 billion and thus a higher volume than ever before. Although international buyers were somewhat more cautious than before in the second half of the year due to the changed conditions, they also generated above-average sales overall (around € 5 billion and a share of around 48%). The focus here was primarily on North American and European investors, who invested almost equally in logistics assets at just under 24% and just over 23% respectively.

Rise in yields continues in the fourth quarter

Although demand can still be categorised as high, the changed interest rate environment has also left its mark on prime logistics yields. Accordingly, the yield compression of recent years has been halted and reversed into a rise in prime yields of 85 basis points year-on-year (+50 bps in the fourth quarter) in the top markets. As a result, the A cities are currently trading at 3.85 % and Leipzig at 4.05 %.

Prospects

"The logistics investment market has already recorded increases in take-up for the fourth year in a row, raising the transaction volume to a new level in 2022 as a whole. Nevertheless, almost two thirds of the result was generated in the first half of the year, which is a clear indication of the existing economic and financial market-driven uncertainties. However, the continuing boom in user markets speaks in favour of logistics investments, which, in combination with improved general conditions, should also provide a noticeable boost to the investment segment again in the course of 2023," says Christopher Raabe.

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
Melanie Engel - Tel: +49 (0)40-348 48-443, Mobile: +49 (0)151-117 615 50, melanie.engel@bnpparibas.com

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