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News Release

Third quarter drives logistics investment market to second-highest transaction volume of all time

​Press release including chart [PDF]


FRANKFURT, 4th October 2018 - Even a decline of 22% compared to the all-time high of the previous year cannot hide the fact that logistics property as an asset class is an integral part of an investor’s portfolio. The transaction volume of €4.91 billion in the current year demonstrates this in somewhat impressive fashion. After 2017, it is the second-highest result of all time for a nine-month period. Three months before the end of the current year, it already exceeds the strong annual volumes of both 2015 and 2016. Comparisons with the 10-year and five-year averages (Q1 to Q3 respectively) prove that logistics real estate has long since left its niche status behind, with a 130% increase compared to the former period although only 52% growth in contrast with the average for the years from 2013 to 2017. In terms of the total commercial transaction volume, logistics property has increased its share from 7% to 12% during the specified periods.
The third quarter made the biggest contribution to the result. During this three-month period, the transaction volume exceeded the previous two quarters at more than €2 billion and was only surpassed by the second and fourth quarters of 2017 in a long-term comparison. Five transactions above €100 million were completed in the period from July to end-September alone.
“The fact that so much has happened and major transactions are again being realised is demonstrated by the number of transactions in the nine months as a whole, as well as the activity in the €100 million range,” said Willi Weis, Head of Industrial Investment at JLL Germany.
While the total number of transactions rose by 11% to 160 in the first three quarters of 2018, nine transactions fell into the €100 million-plus category. In the same period of the previous year there were five deals of this magnitude, but the Logicor and Hansteen transaction saw two exceptionally large portfolios change hands with a corresponding impact on transaction figures. In the first nine months of 2017, the top five deals accounted for 63% of the total transaction volume. In 2018 the percentage is 39% — whereby all but one deal took place in the core segment — with the participation of foreign investors. Such players also have a strong influence on the logistics investment market in Germany as a whole with a share of 71%. This is clearly above average: across all commercial property segments, the share of foreign investors is only 45%.
“Even though the big deals are of course the drivers behind the headline figures, it should not be forgotten what really underpins the success of this asset class. It is in fact the smaller and medium-sized transactions, portfolios and properties with values of up to €15 million each,” said Weis. Such purchases in the so-called mid-cap segment reached a volume of more than €630 million from January to end-September with approx. 110 transactions. “This segment has always proved to be very dynamic and, for example, has significantly outperformed the five-year average (€468 million from 85 transactions). Weis added: “We should not underestimate the fact that such transactions remain essentially stable in less positive market situations.”
"Owing to the strong overall demand and advanced-stage negotiations even in the case of large portfolios, a transaction volume of up to €7 billion could ultimately be attained by the end of 2018,” said Weis. The prime yield is then expected to reach 4.0% (Q3 2018: 4.1%), down from 4.70% a year ago.