Review - Why Logistics Real Estate Leads the Way
10.02.25
The Income Analytics webinar on 10th February 2025, "Why Logistics Real Estate Leads the Way: Stability, Demand, and Resilience," explored key trends and investment strategies in the European logistics real estate market. Moderated by Income Analytics’ Matthew Richardson, Kevin Mofid from Savills, Theo Soeters from Edmund de Rothschild, and Peter Bingel from Boreal Investment Management provided expert insights into the sector’s stability, ongoing demand, and future opportunities.
Missed the webinar? Click here for a link to watch.
Below are some key takeaways from the webinar.
Market Overview & Trends:
- European logistics real estate has seen increased activity, particularly in the last 12 months.
- The sector remains stable, driven by demand from e-commerce, supply chain evolution, and macroeconomic shifts.
- The market is adjusting to structural changes, such as reshoring, nearshoring, and supply chain disruptions
Investment Insights:
- Investors are targeting core markets like Germany, France, Netherlands, UK, and Spain.
- A shift from big-box warehouses to mid-box and smaller industrial assets due to better yield premiums (100-150 bps higher).
- Strong interest in Western European logistics hubs with stable occupier demand.
Occupier Market Analysis:
- Logistics demand is primarily driven by retail (physical and online), grocery logistics, and supply chain efficiency.
- ESG (Environmental, Social, and Governance) has become a top priority for occupiers.
- Nearshoring and reshoring trends are expected to be long-term drivers of demand.
Financial & Economic Factors:
- Interest rate policies remain a key concern, with potential stabilizations in 2025.
- Investment volumes in logistics real estate increased by 11% in 2024 (Savills).
- UK logistics market faces higher financing costs compared to Europe, making European markets more attractive for investment.
- The yield gap over 10 year government bonds is also less attractive for investors in UK logistics property
Challenges & Risks:
- Supply chain disruptions (e.g., climate, geopolitical conflicts, trade policies) are reshaping logistics strategies.
- Cost pressures for occupiers include rising rents, labour, and energy expenses.
- Uncertainty in bond markets and potential inflationary pressures due to tariffs.
Missed the webinar? Click here for a link to watch.
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