EUROPEAN LOGISTICS INVESTMENT BRIEFING Property EU, 28 th January 2014

Transcription

1 EUROPEAN LOGISTICS INVESTMENT BRIEFING Property EU, 28 th January 2014

2 AGENDA Investment activity & pricing Rents and occupier demand Occupier market issues Conclusions 2 CBRE JANUARY 2014

3 INVESTMENT ACTIVITY & PRICING

4 IN EUROPE, WHICH SECTOR IS THE MOST ATTRACTIVE FOR INVESTMENT PURCHASES? Office Logistics Shopping Centres Residential Retail High St Light Industrial Retail Warehouses Hotels Other Source: CBRE Research % 4 CBRE JANUARY 2014

5 INDUSTRIAL PROPERTY INVESTMENT, EUROPE Highest annual total since 2007 Billion * Source: CBRE Research Note: * Provisional and may be subject to small revision 5 CBRE JANUARY 2014

6 CHANGE IN INVESTMENT (%), 2013* VS 2012 Southern Europe > 200% CEE Sweden Netherlands/Belgium All industrial UK France Germany All property All office All retail Source: CBRE Research Note: * Provisional and may be subject to small revision 6 CBRE JANUARY 2014

7 CBRE EMEA PRIME YIELD INDICES Weighted Average Prime Yield (%) Retail Industrial Office German 10Y Bund BPs Dec-88 Dec-89 Dec-90 Dec-91 Dec-92 Dec-93 Dec-94 Dec-95 Dec-96 Dec-97 Dec-98 Dec-99 Dec-00 Dec-01 Dec-02 Dec-03 Dec-04 Dec-05 Dec-06 Dec-07 Dec-08 Dec-09 Dec-10 Dec-11 Dec-12 Dec-13 Source: CBRE Research 7 CBRE JANUARY 2014

8 PRIME YIELD SHIFTS (BPS), 2013 Source: CBRE Research Barcelona Budapest Amsterdam Rotterdam Moscow Brussels Warsaw Munich Lisbon Frankfurt Hamburg Milan Madrid Stockholm Lyon Paris Manchester London Dublin CBRE JANUARY 2014

9 PRIME WAREHOUSE/LOGISTICS YIELDS Present yield relative to high and low of current cycle (%) Current yield Cyclical low Cyclical peak London Frankfurt Hamburg Munich Stockholm Amsterdam Rotterdam Brussels Paris Manchester Warsaw Prague Dublin Milan Madrid Barcelona Lisbon Budapest Source: CBRE Research 9 CBRE JANUARY 2014

10 INDUSTRIAL CAPITAL VALUE GROWTH, EMEA Change per Annum (%) 20% Rental Growth Yield Impact 15% 10% 5% 0% -5% -10% -15% -20% -25% Q Q Q Q Q Q Q Q Q Q Q Q Source: CBRE Research 10 CBRE JANUARY 2014

11 EVM EUROPEAN VALUE INDICES Industrial ex-uk (sub-sectors) Q = Industrial ex-uk Logistics Light Industrial Q4 07 Q2 08 Q4 08 Q2 09 Q4 09 Q2 10 Q4 10 Q2 11 Q4 11 Q2 12 Q4 12 Q2 13 Source: CBRE Valuation 11 CBRE JANUARY 2014

12 RENTS AND OCCUPIER DEMAND

13 EMEA PRIME RENT INDICES Y-O-Y Change (%) Retail Index Industrial Index Office Index All Property Index % Year-on-Year % % Dec-02 Dec-03 Dec-04 Dec-05 Dec-06 Dec-07 Dec-08 Dec-09 Dec-10 Dec-11 Dec-12 Dec-13 Source: CBRE Research 13 CBRE JANUARY 2014

14 PRIME RENTAL GROWTH, 2013 Y-O-Y Change (%) Oslo Amsterdam Gothenburg Zurich Birmingham Glasgow Marseille Helsinki Milan Valencia Source: CBRE Research CBRE JANUARY 2014

15 TAKE-UP: BIG POSITIVES, BIG NEGATIVES Industrial / logistics take-up % chg 2013 vs 2012 Dublin Lisbon Bratislava Prague UK Europe Frankfurt Rotterdam Paris Budapest Amsterdam Warsaw Milan -80% -60% -40% -20% 0% 20% 40% 60% Source: CBRE Research 15 CBRE JANUARY 2014

16 KEY ECONOMIC INDICATORS % Change 15.0% 10.0% 5.0% 0.0% -5.0% -10.0% EU Exports World Industrial Production EU Imports -15.0% Source: Oxford Economics 16 CBRE JANUARY 2014

17 RECOVERY BUILDING... Real GDP Growth, % 3.0% 2.0% 1.0% 0.0% % -2.0% -3.0% Italy Spain Europe France Germany UK USA World Source: Oxford Economics 17 CBRE JANUARY 2014

18 ..AND SHRINKING SUPPLY UK Logistics Availability, million sq ft % Secondhand New / Early Marketed Source: CBRE Research CBRE Logistics data covers units of 100,000 sq ft only 18 CBRE JANUARY 2014

19 OCCUPIER MARKET ISSUES

20 SUPPLY CHAIN CHALLENGES Supply chain efficiencies vital in a slow upturn...and to deal with growth in online retailing Capex decisions: systems, equipment, people, buildings... Innovation in order fulfilment More orders, more combinations, more complexity Centralisation of systems for inventory control: big data Same-day delivery: can t afford to, can t afford not to Absorbing returns Quest for seamless omni-channel supply chain Premium on accessibility, handling capability, throughput, process complexity 20 CBRE JANUARY 2014

21 THE DEMAND DUMBBELL XXL warehouse platforms in strategic locations Urban logistics & parcel delivery centres 21 CBRE JANUARY 2014

22 MAIN ADVANTAGES TO AN OCCUPIER OF OPERATING FROM AN XXL-WAREHOUSE Image/profile Reduction in unit storage costs Reduced transport Economies of scale Centralisation of operations 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 22 CBRE JANUARY 2014

23 XXL WAREHOUSES 14% of the market and rising Centralisation of inventory More efficient network footprint Accommodate value-add services Simpler information control and order fulfilment Reduce pressure on storage space in stores Integral part of supply chain > longer leases Long production cycle / BTS Unusual locations Large lot size / single asset risk 23 CBRE JANUARY 2014

24 PARCEL DELIVERY CENTRES 24 CBRE JANUARY 2014

25 PARCEL DELIVERY CENTRES Rapid transfer of goods; minimal or no storage Reduction in inventory holding and handling costs Faster process speed through the supply chain Enhanced customer service Final mile solution close to end point of consumption Site requirements compete with other uses Low site coverage (30-35%) Market unconvinced by evidence of rental premia Limited scale of capital market: opportunity or risk? 25 CBRE JANUARY 2014

26 CONCLUSIONS

27 CONCLUSIONS AND ISSUES Strong investment tilt towards logistics last year Yields narrowed but spreads still large Rental growth starting to emerge in the stronger markets Far-reaching and rapid supply chain challenges Understanding occupiers in a moderate upturn Emerging investment niches Pricing specialisation / single asset risk First mover advantage: opportunity or risk? 27 CBRE JANUARY 2014

28 EUROPEAN LOGISTICS INVESTMENT BRIEFING Property EU, 28 th January 2014