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European logistics and industrial real estate investment volumes surge to record high in 2014

  • Annual revenue up 28% in 2014 compared to 2013
  • Q4 quarterly volumes up 92% compared to Q3 according to JLL

Full year logistics and industrial investment volumes for 2014 reached a record €21.1 billion, marking a 28 percent increase on the €17.0 billion recorded in 2013 according to JLL. Volumes in the final quarter reached an exceptional €8.2 billion alone, setting a new quarterly record.

The two leading markets, the UK and Germany at €8.2 billion and €3.6 billion respectively, saw new national records last year, driven by a flurry of portfolio transactions.  Meanwhile, new annual records were also seen in the Czech Republic, Poland and Switzerland.

Tom Waite, National Director EMEA Logistics Capital Markets said: "It has been an outstanding year for logistics and industrial investment, highlighting the continued and strengthening confidence in the asset class which has been buoyed by strong occupier market fundamentals and shrinking vacancy in many European markets. Demand for single asset and large portfolio opportunities will remain very high this year from domestic and international capital sources and we expect transaction volumes to remain at healthy levels." 

Large size portfolio transactions remain a strong theme with the total volume traded exceeding €10 billion last year (up 25 percent year-on-year). Whilst almost 50 percent of portfolio assets traded were located in the UK and Germany, portfolio transactions accelerated across Central Europe to reach €1.4 billion (up from just €25 million in 2013) and grow more than fourfold to €510 million in the Southern periphery with investments in Italy, Spain and Portugal.

Alexandra Tornow, Head of EMEA Logistics & Industrial Research at JLL said:  "As we predicted, the downward pressure on prime logistics yields has continued throughout 2014 and into 2015.  This is driven by the weight of money targeting the asset class, the attractiveness of the debt markets and increasing occupier demand.  New money continues to land in a number of key European markets and we expect this trend to continue through the course of this year. We see continued yield contraction through the course of this year, and furthermore a tightening in the spread between prime and secondary yields.