Germany favoured in red-hot logistics market

A new report published by investment manager Realogis Real Estate shows just how strong the focus of logistics investors in Europe has been on investments in Germany.

As we reported in the last issue of REFIRE, the market for German logistics assets was red-hot in the first quarter of the year, with investment volume of more than €1.2 billion, itself more than half of the total volume for the full year 2013. This time the emphasis from European investors was increasingly on the larger cities particularly Hamburg, Berlin, Frankfurt am Main, Cologne, Leipzig and Stuttgart

“In contrast, German and North American investors also bought in eastern Bavaria in locations that are more peripheral but nonetheless strategically important for the logistics industry,” according to Nicole Kinne, research analyst at Realogis Real Estate GmbH.

The Realogis report shows that transactions in the quarter were distributed across most of Germany’s states, but three quarters of all deals were in western Germany. These included established logistics regions such as Rhine/Main, Rhine/Ruhr and Hanover/Brunswick/Wolfsburg as well as in logistics regions with growth potential, such as the “Sachsendreieck” or Saxony Triangle (Dresden, Chemnitz, Leipzig) and the South German locations of Dingolfing, Regensburg and Ingolstadt that are dominated by the automotive industry.

Portfolio sales made up much of the record transaction volume in the first quarter of the year, generating around €824 million (71% of total volume). The largest transaction closed was about €300 million, involving the sale of 10 logistics properties by Tristan Capital Partners to joint venture company Segro European Logistics Partnership (SELP). Another significant transaction was the entry into the market by Malaysian pension fund EPF via the Kwasa Goodman Germany Fund managed by Goodman Property Investors.