European industrial RE investment surges

30 May 2010

A sharp rise in investment activity in the European industrial and logistics market reflects increasing confidence in the sector in 2010, particularly in hubs across Europe including the Netherlands and Germany, according to CB Richard Ellis.

Investment levels in the second half of 2009 rose by 52% compared to 1H09, taking full-year 2009 turnover to £6.5bn. .

The industrial sector maintained its 9-10% share of the overall European market in 2009. "Investment demand is focused on high quality buildings, so shortages of prime stock may begin to inhibit turnover growth, forcing buyers to widen their search criteria and turn their attention back to build-to-suit solutions. This will shift some of the demand focus towards value-add opportunities with higher void risk and asset management challenges," said CBRE's James Markby.

Food retailers have proven to be a key source of demand for space across the European industrial and logistics sector at the end of 2009 and into 2010. CBRE says that although rents are still under downward pressure, the severity of decline is clearly easing pie