Erik Barnekow, Head of EMEA Industrial and Logistics, Colliers International said: “UK and Germany remained top investment destinations, followed closely by the Nordics, where a significant surge in investment volumes took place. These three regions attracted nearly 60% of the capital invested in the European logistics market.

“The volumes were pushed up by a €1.2 billion portfolio purchase consisting of 195 properties (ca. 4.7 million sq m) across 11 European countries by the joint venture of Norges Bank Investment Management and Prologis.

The UK saw a y-o-y decrease in investment volumes, however, it continues to outperform other markets. For Germany, it was the best mid-year result for logistics investments since 2008. Investors focused on high quality portfolio properties. In terms of cross-border acquisitions, Norway and the US were the main sources of capital. Norges Bank Investment Management was the top buyer having invested (€1.2 billion) in European market, almost double of the total volume invested by the US buyers.

Central and Eastern Europe saw increased interest from investors, with the highest ever investment volume recorded in Russia. Many other markets saw a significant surge in industrial investment levels, including Italy, where two large portfolio transactions boosted investment volumes to a level not seen in this market since 2008.

Prime warehouse rents in the vast majority of the monitored markets remained stable. However, limited availability of modern space has pushed up the rents in some locations.
The most significant increases in prime warehouse rents in the first half of the year took place in Minsk (16.7%) and Zagreb (10%), as well as in Istanbul, Venlo, Riga, Vilnius and Gothenburg. Sweden is demanding the highest prime industrial rents in Europe with Stockholm the most expensive (875 eur/sq m/month), followed by Gothenburg (675 eur/sq m/month) and Malmo (550 eur/sq m/month).

Despite limited supply levels, rents are forecast to remain broadly flat. Further increases are expected in Riga and Vilnius, as well as in Amsterdam, Oslo, Birmingham, Kyiv and London Heathrow; while Lisbon, Rotterdam and Venlo might see some downward pressure.

Erik Barnekow, Head of EMEA Industrial and Logistics, Colliers International concluded: “Interestingly, no fall in rents is expected this year in markets with the highest levels of space under construction; that is in Moscow, Istanbul, Prague and Minsk. Most of the space to be delivered is already leased; or the new supply will fill the gap in those markets suffering from a significant lack of modern, high quality facilities.”