High degree of accessibility, low time distance from urbanized areas through new road networks (western suburbs, Athens city centre, northern and eastern suburbs etc), access to the airport, access to the ports of Piraeus and Patras, and availability of parcels of land suitable to attract industrial, warehousing and logistics activities were some of the variables that affected the growth of the industrial and logistics market in Attika, Greece. Areas such as Mandra, Magoula and Aspropyrgos in the western part of Attika and the geographical region of Mesogeia, which includes Koropi, Kalyvia, Spata, Paiania and Markopoulo, exhibited an important growth and urban development in the last 10 years and are characterised by industrial clusters and successful economies of scale.
Prime Industrial/warehousing yields are estimated at 9.5-10.5%, following an increase in the last two years, which occurred to capture the increased risk and uncertainty. Secondary property yields have increased more as these properties are seen as more risky and less desirable for transactions in this period, while it is more difficult to source the necessary funding. It must be also mentioned that properties of limited prestige, importance & specifications tend to allow for yields that can exceed the aforementioned high levels in order to attract investors. Respectively, the rental prices of modern warehouses range from €3,8-4,5 / m2 while properties of secondary importance €2,5-3,5 / m2. It is worth mentioning that investment activity is extremely limited due to the fact that the market has yet to show signs of stability. However areas connected by Attiki Odos (Mesogeia, Asporpyrgos, Mandra, Magoula and Elefsina) attract the most interest and have the highest values.
Spyros Raptis Valuation Manager at Colliers international noticed, ‘During the year, it is expected that investment activity in the logistic market will remain limited due to the uncertainty of the economic environment and to limited bank financing. However, increased yields combined with lowering of rental values will raise opportunities and motivate the market while equilibriums are expected to prevail in the medium term.”
In Lisbon, demand from occupiers is down from peak levels and has shown no sign of increasing in 2011. Although on the plus side prime rents in Lisbon have shown no change in the past 12 months, secondary properties have shown weakness, however. Prime rents, currently at €5.5 / m2 per month, sitabout 8% below the levels seen in mid-2009. Investment activity in the Lisbon industrial and logistics market is down strongly from 2010, with prime investment yields standing at around 10% for the very best long leased properties.
The industrial & logistics market in Dublin has seen sharp falls in leasing activity, investment and achievable rents since 2008. In the first half of 2011, take-up in the city’s industrial & logistics market has come in at around 65,000 m2 - well below take-up levels at the peak. Activity remains concentrated on existing properties, with little development activity – be it speculative or design and build. Prime rents in the city’s main industrial area have fallen from €8.8 per sq m per month in mid-2009, to €5.0 / m2 per month now – a fall of over 40%. Rents have been even weaker on secondary properties. Investment activity has ground to a halt in the market, not helped by the lack of clarity regarding theGovernment’s proposals on ending upwards-only rent reviews on existing leases. Prime investment yields had reached 5.5% at the peak of the market in 2007, but as of now we believe they stand at around 9.0% - although it should be noted that there is little hard transaction evidence to base this on.
Vienna has seen prime rental values fall only mildly in recent years, down 8% since mid-2009, to stand currently at €5.5 m2 per month. Declining industrial activity has impacted the market, and rents on secondary, or outmoded, properties have fallen further on the back of limited demand. There is occupational demand in the pipeline from logistics providers; however, current uncertainty has led them to hold back their requirements until the economic outlook becomes clearer. Investment activity has been very limited in the last two years. Prime yields are currently around 8.75% and are expected to increase slightly as investment sentiment weakens further