The already strong demand for logistics investments in recent years reached a new peak in 2020. With a nationwide investment volume of around 81. 6 billion euros, around 9. 0 billion euros were invested in logistics and production properties. This corresponds to a share of 11 percent. This trend continued in the first half of 2021. With a share of 10 percent, logistics and production properties have even surpassed retail properties and are the most sought after asset class in terms of investment volume after office properties.
Due to the strong increase in demand, yields have been on the decline since 2009. While the top-five locations in Berlin, Düsseldorf, Frankfurt, Hamburg and Munich had a top-performing return of just under 7. 5 percent in 2009, only around 3. 4 percent had been reached at the end of 2020. In the course of the first half of 2021, the return continued to decline and was last only 3. 3 percent. This means that the yield fell by around 0. 4 percentage points within one year.
In the medium term, yields of 5. 5 percent or less will be the rule rather than the exception for logistics properties. As a result, logistics properties are lower than specialist stores, specialist market centers and especially shopping centers in terms of profitability and are only slightly higher than office properties.
“On the other hand, logistics properties have impressively demonstrated their resilience to crises. Moreover, the strong demand from investors shows that investment security plays an important role for the majority of buyers”, explains Borutta. The pandemic has also further strengthened online commerce, particularly in the fashion and electronics sectors, which were already strong before the crisis. Therefore, there will be an increasing demand for logistics properties in the future. A further decline in yields is therefore likely.
You can download the Trend Report here (9 MB).