Germany ranks top in logistics market attractiveness, says Savills

10 June 2019

Germany, which has come top of the Logistics Market Attractiveness (LMA) Index with 70.2 points, is currently a strategic market for investors looking to capitalise on growing cross-border ecommerce trends, according to the international real estate advisor. So much so that prime yields have seen a declining trend – currently sitting between 4.1 – 4.4%.

France and the United Kingdom come a close second in the ranking (68.3 and 68.1 points respectively) with high levels of investor interest in the logistics sector. The UK, which boasts the most mature ecommerce market, shows the lowest spread between internet and online retail penetration across Europe, demonstrating that internet usage has fully given way to online purchases. This trend shows no signs of slowing and ecommerce is expected to increase by 6.7% pa over the next five years (according to Statistica) and, as a result is already translating into growing demand from logistics investors.

Marcus de Minckwitz, Director, Regional Investment Advisory EMEA, at Savills, commented: “Looking at the spread of the Savills LMA Index across Europe, it is clear that Western Europe is leading the charge when it comes to ecommerce penetration and subsequent investment into the logistics market although its effects can be felt across the continent. Despite a challenging socio-economic outlook, retail sales across Europe are expected to rise an average 2.1% per annum until 2020 and, with more of this being spent online, we anticipate demand from both occupiers and investors for the logistics sector to increase further during this time.”

Lydia Brissy, Director, European Commercial Research, Savills, added: “Western Europe, which has always been ahead in the property cycle, acts as a useful case study for investors looking for value-add opportunities across the continent. As the logistics sector in countries such as Germany, France, the UK and the Netherlands continue to boom, we can expect to see Central and Eastern Europe catch up in not too long.” 

The Netherlands and Ireland rank fourth and fifth respectively in the index with markets expected to mature as the relationship between the retail and logistics sector continues to flourish.

 
 

Key Contacts

Marcus de Minckwitz

Marcus de Minckwitz

Director
Omnichannel Group

Head Office London

+44 (0) 20 7409 8755

 

Lydia Brissy

Lydia Brissy

Director
European Research

Head Office London

+ 33 (0) 1 44 51 73 88