Press release including chart

Press Release
More than €1 billion for logistics and industrial property in the third quarter the asset class continues its record-breaking run
FRANKFURT, 2nd October 2015 - The transaction activity on the German logistics and industrial property
market has been growing from quarter to quarter. After almost €700 million in the first quarter and €950 million
in the second, the billion-euro-threshold has now been surpassed: €1.055 billion was invested in this asset class
between July and September. Thus the transaction volume totalled €2.7 billion for the first three quarters of the
year, equating to a 20% increase year on year. Compared to the five-year average, the volume increased by as
much as 84%. Based on expectations of an equally strong final quarter, 2015 is once again heading towards a
new transaction record that would exceed last year’s result (€3.6 billion). “How close we will come to the €4
billion mark depends on whether the deals currently under negotiation will take place before the end of the
year,” said Willi Weis, Head of Industrial Investment Germany at JLL.
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More than €1 billion for logistics and industrial property in the third quarter the asset class continues its record-breaking run
Foreign capital sources made up the biggest share of the nine-month volume in 2015, accounting for €1.9
billion. Of the six largest deals, Asian investors were responsible for five. Already in recent years, the logistics
property investment market has become increasingly international in character. Three years ago, the share of
foreign investors was just 44%, but this increased to 51% in 2013 and 65% in 2014 - a level that also applies to
the current year. The logistics property investment market also has a stronger international character than
investment markets for other property segments. Across all commercial property investment classes, the share
of foreign investors is much lower at 54%. “The German logistics investment market has been driven by foreign
capital for a number of years. New investors, such as those from the Asian region, are increasingly crowding
into the market in the search for good investments. At the same time, they are no longer coming into the market
with “only” €200 million-€500 million to invest, but with sums running into billions, much of which is pension
funds,” said Weis. Most transactions are realised without conditions on financing and normally with a much
lower LTV than was usual in 2008. “At the same time, equity capital is much more sensitive to risk in contrast to
borrowed capital. This raises the pressure on good and very good logistics investments. In the current financing
environment with limited alternative investment options and Germany’s continuing attractiveness as the engine
of Europe, a weakening of this situation is not to be expected,” said Weis.
Three months before the end of the year, individual transactions amount to €1.75 billion and have already
exceeded the volume for the whole of last year. Included here is the sale of the H&M logistics centre in
Hamburg-Allermöhe to a South Korean investor. Already in early 2015, Asian capital was invested in the
purchase of the 80,000-sqm central warehouse of Robert Bosch GmbH in Worms.
Portfolio sales accounted for 35% of the transaction volume in the logistics sector in the first nine months. This
is comparable to the average for all asset classes (33%).
The very high demand for logistics and industrial property by investors from both the domestic and foreign
markets continues to lead to further price rises and therefore falling initial yields. The average value for the Big 7
is 5.37%, which is 15 basis points lower than three months previously and as much as 91 basis points down on
the same period of last year. In no other property investment class has such a strong decline in yields been
evident. Prime yields for individual transactions are only being achieved in core locations with long-term lease
contracts and creditworthy tenants: “In addition, between 5-7% is being paid for logistics portfolios with good
logistics properties and volumes of above €80 million,” said Weis. He added: “We have not noticed increases in
yields on this scale for core-plus and value-add products.” This is why investor interest is not only directed at the
increasingly short supply of core properties: the figures show that 46% of the volume in the first three quarters
related to core transactions while at least 37% took place in the core-plus segment. Value-add products (for
example, properties with more vacancies and shorter lease terms) accounted for a share of 17%. “In such
investments buyers expect even stronger potential to increase value through lettings, restoration or renovation,”
said Weis.
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More than €1 billion for logistics and industrial property in the third quarter the asset class continues its record-breaking run
“In the meantime, logistics property has finally emerged from the shadow of other asset classes. A return to
former times is almost inconceivable as many different types of investors are already comfortable with this
segment today. The attractiveness of the logistics market, with steady lettings volumes in the last 10 years,
stable rents and extremely low vacancies in almost all locations, lies in its solid foundations and continuing
growth through diversification and outsourcing in production and retail. In addition, the short development times
and therefore fast reaction times mean that an excessive oversupply is not likely to occur even in declining
markets,” said Willi Weis with confidence.
Contact:
Phone:
Email:
Willi Weis, Head of Industrial Investment Germany
+49 (0) 69 2003 1026
[email protected]
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JLL (NYSE: JLL) ist ein Dienstleistungs-, Beratungs- und Investment-Management-Unternehmen im Immobilienbereich. Das Unternehmen bietet spezialisierte Dienstleistungen für Eigentümer, Nutzer und Investoren,
die im Immobilienbereich Wertzuwächse realisieren wollen. Der Jahresumsatz aus Honoraren beträgt $ 4,7 Milliarden, der Bruttoumsatz $ 5,4 Milliarden. JLL, ein „Fortune 500“ Unternehmen, ist weltweit mit über 230
Büros vertreten und in mehr als 80 Ländern tätig mit ca. 58.000 Beschäftigten. Im Auftrag seiner Kunden verantwortet JLL im Bereich Management und Real Estate Outsourcing Services ein Portfolio von 316
Millionen Quadratmetern und hat 2014 Käufe, Verkäufe und Finanztransaktionen im Wert von $ 118 Milliarden abgeschlossen. JLL ist der Markenname und ein eingetragenes Markenzeichen von Jones Lang LaSalle
Incorporated.
Weitere Informationen finden Sie unter http://jll.de.
LaSalle Investment Management, der Investment-Management Geschäftszweig des Unternehmens, verwaltet ein Vermögen von $ 56 Milliarden.
Stand: Juli 2015
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