PropertyEU European Logistics Investment Briefing at the Expo Real – Expert panel with Katrin Poos
The motto of the expert panel at Expo Real, to which our CEO Katrin Poos and managers of international logistics real estate developers and investors under the moderation of Richard Betts of PropertyEU exchanged, was “Beds & Sheds”, urban logistics or big box? Which cities and which asset types will outperform? What is the investment outlook? The interest of the Expo Real participants was great, the chairs in the International Investors Lounge were occupied to the last detail, which was probably not only due the topic, but also due to the panellists who are well-known to the logistics real estate industry: Robert Dobrzycki (CEO) Panattoni Europe, Ian Worboys (CEO) P3 Logistic Parks, Philip Dunne (CEO) CBRE Global Investors, Mahdi Mokrane (Head of European Research & Strategy) LaSalle Investment Management and Ben Bannatyne (President) Prologis Europe, The Netherlands.
According to the summary of PropertyEU, the panel participants agreed that logistics still has the “feel-good factor”. The answers of Katrin Poos to the questions of the moderator Betts reflected this statement, too.
Logistics continues to perform well and investor demand remains high. How much of this is based on current demand – or is this really more about expected growth?
The current demand of investors for logistics real estate is definitely a driver. We do not expect any significant price increases through further yield compression or rental growth, except for large core real estate or urban logistics rents. Increasing tenant demand will, in our opinion, have a positive impact on the long-term stability and value of logistics real estate. Mainly because land is limited for further development and the demand and supply of new space will remain balanced. Furthermore, the rapidly growing e-commerce sector in Germany is stimulating the demand for logistics real estate. Since 2008, he has recorded an annual sales growth of 24%.
Is the anticipated growth mainly from e-commerce or is traditional logistics still a driving force for investors?
Demand for differnt types of properties will remain, with e-commerce shaping future growth. Finally, the goods ordered online must be stored, packed and commissioned. Likewise, the “big boxes” are still needed due to growing productivity, such as in the automotive and food industry for example. Take a look at our portfolio: 50% of our properties serve e-commerce, of which 28% of our tenants pursue a multi-channel strategy and 22% are courier and parcel service providers in mechanized delivery basis or distribution centres.
Is there an opportunity to grow a substantial portfolio in this sector? Or is it too difficult to compete?
With regard to our track record and our fund products, we can say with certainty that there was and will be growth potential in the logistics real estate investment sector in Germany. Everywhere there is competition and with enough capital and a willingness to keep pace with current price developments, everyone remains competitive – there will be more than enough investment opportunities available.
With an established network of developers and small independent brokers and tenants in the relevant market, brand awareness, transaction security and speed, and last but not least, the confidence of investors and sellers in your company, you have the opportunity to buy for better returns and build a substantial portfolio.
Professional asset management, as well as the ability to identify development potential and realise it in-house, also puts you in a position to acquire older or smaller properties with potential for re-densifying – there the competition is generally smaller.
Where would you invest? Where do you see opportunities in the market?
I would still invest in logistics as close as possible to Europe’s metropolitan areas, gateway hubs and in e-commerce properties as one of the main drivers of demand. In addition, brownfield developments may be interesting.
Watch the whole expert panel on the PropertyEU TV Channel: