European logistics investment flows rise sharply

  Investment flows in Europe’s logistics property markets increased sharply during the first half of 2010, albeit with little impact on yields, according to a new report from ProLogis.   The distribution expert today released a report on the state of the industrial property markets in Europe, titled Glimmers of Recovery.   The report is based on market statistics and data compiled from a variety of sources, including ProLogis market officers, brokerage companies and market research groups.   The information covers distribution property markets in the United Kingdom as well as northern, southern and central Europe for the first half of 2010.   The report also found that the construction pipeline remained subdued during the first half of 2010 with the exception of Northern Europe.   At midyear 2010, occupancy rates across Europe were holding steady but varied widely. They ranged from 90% or more in the Netherlands, Belgium and Southern Europe to 83% to 84% in Central Europe and the UK.   Pan-European demand for distribution space continued to strengthen during the first half of 2010, buoyed by supply chain reconfigurations and the unrelenting search for lower operating costs and supply chain efficiencies.   The report concluded that Europe’s dearth of large, modern, and efficient distribution facilities, along with the users’ emphasis on improving the efficiency of their pan-European distribution, continues to impart a modest degree of uplift to demand for space.   Leonard Sahling, first vice president of the ProLogis Research Group, said: “Despite its volatile sovereign debt crisis, Europe’s economic recovery has managed to gain traction in recent months, and its distribution property markets have begun to show signs of improvement.   “Europe’s logistics property markets are at a transitional stage of the real estate cycle where leasing market conditions have stopped deteriorating and are on the threshold of recovery.”   nick.whitten@estatesgazette.com   To access all EGi news stories and commercial property data sign up for a free trial today, or visit the subscription options page to find out more.