European Industrial and Logistics Investment Levels Remain High but Slowdown is Apparent in Some Markets

The latest research from global real estate advisor, CBRE, shows that investment into European industrial & logistics increased by 18% for the first nine months of the year when compared to the same period last year.

An exceptionally strong start to the year, driven by €17.5bn of investment in Q1, has pushed year-to-date investment volumes to €46.5bn, representing an 18% increase on the same period last year whereby investment volumes reached €39.4bn. Third quarter investment totalled €14.7bn, up 3% on the same quarter of 2021 which saw volumes of €14.3bn.

Jack Cox, Head of European Industrial & Logistics at CBRE said that despite the increase in investment volumes, activity has started to slow across the sector. He added: “The high activity levels in Q1 have contributed greatly to the year-to-date figures and continued rental increases across Europe have helped to offset yield expansion in some markets. However, economic pressures are starting to affect sentiment and we are seeing investors approach with caution as we head into the final quarter.”

CBRE’s research showed that performance was mixed across the region throughout the third quarter. The UK, the largest market in Europe, was the first country to reflect a slowdown with a 17% fall in Q3 investment volumes when compared to the same period last year.

However, third quarter investment volumes in Spain trebled, rose fourfold in Sweden and Portugal achieved a record quarter. Some of the larger markets also saw increases, including France and Germany at 42% and 33% respectively.

Mark Cartlich, Senior Director, EMEA Industrial & Logistics, CBRE

The UK was the first market to show signs of a slowdown this quarter as it has seen the steepest increases in debt costs, but there were also weaker volumes in Italy, Norway, Denmark and Central Europe, so we would be wary of focusing too much on the year-to-date trends and rather draw focus on the current market backdrop.

Mark Cartlich, Senior Director, EMEA Industrial & Logistics, CBRE