Logistics investment market in second place in the asset class ranking, unbeatable in the portfolio segment

BNP Paribas Real Estate publishes data for the third quarter of 2024

Even if the very good conditions from the record year 2022 (around €8.5 billion in Q1-3) are not yet achievable again, the logistics investment market is on a noticeable upswing in the current year. With a transaction volume of almost €4.4 billion, logistics investments have exceeded the previous year's turnover by almost 20%. This is the result of an analysis by BNP Paribas Real Estate.

"What is particularly pleasing here is that not only was the previous year's figure significantly higher, but the decline compared to the long-term average was also comparatively low. With a deviation of just -13%, logistics investments show the smallest difference to their respective average values among the top property types, with retail properties at -38% and office assets even at -75%," explains Christopher Raabe, Managing Director and Head of Logistics & Industrial at BNP Paribas Real Estate GmbH. This puts the logistics investment market (25% of commercial investments) in a good second place, just behind the retail segment (27%) and ahead of office transactions (20%).

In contrast, the logistics investment market is leading across all asset classes in the portfolio segment, in which just under €2.1 billion, or 47% of the total volume, was invested. Overall, package sales in the triple-digit million range were registered in all three quarters. The largest transactions of the last three months and the year as a whole included the Blackstone acquisition of an 80% stake in the Burstone Group's pan-European logistics platform, of which seven properties are located in Germany.

Meanwhile, prime yields have stabilised since the beginning of the year. The net prime yields in the A-locations remain unchanged at 4.25%. A sideways movement has also been recorded in Leipzig. A figure of 4.45 % can still be applied there.

81 % outside the locations, big deals at 49 %

The distribution of turnover among the top markets clearly reflects the fact that it is not the largest logistics regions but the locations outside the most important agglomerations that are largely responsible for the increase in turnover. The most important logistics hubs together contributed around € 848 million (-5%), while the other locations increased by 28% to € 3.5 billion. Berlin (€ 198 million), Frankfurt (€ 171 million) and Hamburg (€ 139 million) form the leading trio within the top markets.

A look at the size categories confirms the improved market sentiment to the extent that large deals are now possible again. With a total of more than ten transactions in the single-deal and portfolio segment, investments in the three-digit million range account for a market share of a good 49%. A not insignificant proportion of these sales is attributable to international capital. Investors from North America (33 %) and other European countries (21 %) are currently particularly active.

Prospects

The logistics investment market was able to capitalise on the improved conditions in the first three quarters and even move within striking distance of its long-term average. This leads to the assumption that investor confidence in an imminent end to the price discovery phase in the logistics segment will return more quickly than in the office sector, for example.

In this context, the regained stability is characterised, among other things, by the fact that the market did not benefit exclusively from a single good quarterly result over the course of the year, but was able to record three annual periods with good volumes in each case. The fact that major deals were also brought across the finish line in all three quarters confirms the continuing upward trend. Another positive factor is the lively market activity in the portfolio sector: In total, around 53% of the nationwide portfolio turnover is attributable to the logistics sector, which confirms the observation that logistics investments are at the top of investors' lists when it comes to parcel sales. As a result, further portfolios and company takeovers are already in the finalisation phase, which should boost sales in the final quarter.

"Even if the long-term average figure of around €7.1 billion for the year as a whole will probably be difficult to achieve in the coming months, from today's perspective we must assume that the fourth quarter will also be good and that the overall balance sheet will be convincing compared to other asset classes by the end of the year. In any case, there are currently no signs of further price declines," 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
Pia Ewald - Tel: +49 (0)69-298 99-941, Mobile +49 (0)160-905-800-19, pia.ewald@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.

As part of its commitment to sustainable cities, BNP Paribas Real Estate aims to play a leading role in the transition to creating more sustainable real estate that is low-carbon, resilient, inclusive and conducive to well-being. To this end, the company has developed a CSR policy with the following four objectives: to improve the economic performance and use of buildings in an ethical and responsible manner; to enable a low-carbon transition and reduce the environmental footprint; to ensure the development, engagement and well-being of employees; and to be an active player in the property sector, building and promoting local initiatives and partnerships.

Further information: www.realestate.bnpparibas.com/

About BNP Paribas in Germany

BNP Paribas is a leading European bank with an international reach. It has around 183,000 employees in 63 countries, including almost 146,000 in Europe. The BNP Paribas Group has been active in Germany since 1947 and has successfully positioned itself on the market with 12 business units. Private clients, companies and institutional clients are served by around 6,000 employees nationwide in all relevant economic regions. The broad range of products and services offered by BNP Paribas corresponds to that of an innovative universal bank. www.bnpparibas.de