Logistics Trend Report 2021DIWG publishes ...

The already strong demand for logistics investments in recent years reached a new peak in 2020. Of a nationwide investment volume of approximately €81.6 billion, around €9.0 billion was 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 even surpassed retail properties and, in terms of investment volume, are the most sought-after asset class after office properties.

Due to the strong increase in demand, yields have been on a downward trend since 2009. While the prime yield at the top five locations Berlin, Düsseldorf, Frankfurt, Hamburg, and Munich was just under 7.5 percent in 2009, it had dropped to around 3.4 percent by the end of 2020. During the first half of 2021, yields declined further, most recently standing at only 3.3 percent. This represents a decrease of approximately 0.4 percentage points within one year.

In the medium term, yields of 5.5 percent or less for logistics properties will likely be the rule rather than the exception. In terms of yield levels, logistics properties are thus lower than retail parks, retail park centers, and especially shopping centers, and only slightly above office properties.

“On the other hand, logistics properties have impressively demonstrated their resilience during crises. The strong demand from investors also shows that investment security plays an important role for the majority of buyers,” explains Borutta. The pandemic has further strengthened e-commerce, particularly in the sectors of fashion and electronics, which were already strong before the crisis. Therefore, a continuing increase in demand for logistics properties is expected. A further decline in yields is thus likely.

You can find the trend report as a PDF HERE.