9 February 2017 – Expansión
The boom in e-commerce and the arrival of the large distribution giants, like Amazon, have caused a genuine tsunami in the real estate market and in the way we understand logistics. Logistics assets – which were, until recently, the ugly duckling of the sector – have really blossomed and now represent one of the investment segments with most potential, given their risk-return relationship, according to the experts.
Operators are increasingly looking for more large logistics warehouses on the outskirts of cities, which they combine with distribution centres situated on ring-roads to make deliveries on time and on budget.
“The effect is a reflection of new consumer habits and online purchases, as well as of consumer expectations, which require products to arrive on time and to be easily returnable (inverse logistics)”, explains Antonio Montero, Director of the Industrial-Logistics business at Aguirre Newman.
Alberto Larrazábal, National Director of Industrial and Logistics at CBRE, said that there has been an increase in the e-commerce market. “Operators are increasingly demanding more logistics and distribution space. In Madrid and Barcelona, 400,000 m2 and 700,000 m2 of space was leased, respectively, in 2016 and e-commerce accounted for 25% of those amounts.
Javier García-Mateos, Partner in Financial Advisory at Deloitte said that “retailers are starting to use their own establishments in cities as logistics and distribution points for e-commerce”.
García-Mateos also said that there is greater demand for the development of cross-docking warehouses (which reduce the time needed for logistics operations and which can be adapted to the needs of e-commerce) in the vicinity of the main urban nuclei. (…).
“Logistics spaces are moving increasingly closer to cities, there are even warehouses inside city centres. These are points where companies can serve their customers in the fastest and most effective way”, said Luis Guardia, Director of the Logistics and Industrial Area at JLL.
Guardia also explained that the major department stores are also committed to opening “regional hubs” to get closer to the major urban nuclei.
In terms of investment, Larrazábal considers that the logistics and industrial sectors are becoming more fashionable by the day. “Large funds and private investors will end up acquiring these assets”, he said.
Over the last three years, investment volumes have grown considerably, to reach more than €800 million last year.
One example of this investor appetite is Merlin’s purchase of Saba Parques Logísticos – the company that groups together Saba’s stakes in five parks – for €115 million.
“The logistics market is interesting as it allows the Socimis to diversify and add new assets to their portfolio that generate returns not afforded by the other assets at the moment”, said García-Mateos. Other operators that are committed to this market include Logicor (Blackstone), Zaphir, Prologis, Rockspring, GreenOak and the joint venture between Colony and Neinver.
In the same way, experts indicate that development activity has resumed. “Developers and investors know that there is latent demand in high quality logistics assets and this is encouraging them to buy land and build assets”, said Montero
Original story: Expansión (by Rebeca Arroyo)
Translation: Carmel Drake