German Logistics Giant Hansainvest Set to Invest €300M in Southern Europe

29 May 2018 – Eje Prime

The logistics business is looking to Spain to grow. The giant Hansainvest is preparing to carry out an offensive in the logistics sector in Europe and is planning an investment of between €200 million and €300 million in the logistics sector in markets such as Spain, the UK, Germany and France, according to explanations provided by the company. Its interest in Spain would represent the group’s entry into the country.

The group, which has just appointed Philipp Middendorp to lead the group’s logistics business, is going to start a new round of logistics assets purchases between now and the end of 2019 as part of its growth strategy. In addition to Southern Europe, the company is also going to focus on the Nordic countries and Poland.

According to the company, its wish list includes acquiring core and core plus properties, although “it will also look at possible alternative uses of properties”, explain sources at Hansainvest. “We intend to mainly buy traditional logistics assets, but we will also focus on the acquisition of projects under development”, they add.

“There is a great deal of demand for logistics assets from players in the domestic and international markets. The only way to keep making attractive investments in this context is to broaden our market approach”, they say.

The German logistics group’s asset portfolio comprises residential properties, as well as office buildings. The company also has buildings such as hotels, retail spaces and logistics assets, which is a business that it has decided to develop more over the coming months. In total, Hansainvest manages an asset portfolio worth more than €4.3 billion in 18 countries.

Lack of supply

Hansainvest is going to have to undertake a detailed study of the Spanish market and not let escape any opportunities that arise, given that one of the problems facing this business in the Spanish market is the lack of supply. This means that overall investment in the sector is going to fall by 20% in 2018, although it will still exceed €1 billion, according to a report from the real estate consultancy CBRE.

Leasing is also going to be a problem this year. In Madrid and Barcelona alone, absorption is going to decrease from more than 1.5 million m2 recorded last year to just over 1.2 million m2 this year.

The product shortage is going to lead to the generation of new, but insufficient supply in the two major capitals in 2018. In Madrid, 500,000 m2 of new space ix expected to come onto the market this year, compared with 342,000 m2 in Barcelona.

Nevertheless, cities on the rise in recent years in the logistics market such as Zaragoza, Sevilla and Valencia have minimal supply (…).

Rents on the rise

Of course, the high demand, limited supply and poor outlook for new developments are inevitably leading to an increase in rental prices. That is what happened in 2017, with growth of 5% in Madrid and Barcelona, and in 2018, prices may rise by even more. CBRE’s report points to increases of approximately 7% in the cost of prime assets in Madrid, where prices will reach an average of €5.60/m2/month.

In Barcelona, one of the most expensive cities in Europe in terms of logistics rents, the rental of high-quality warehouses could cost as much as €6.75/m2/month this year, up by 4% compared to 2017.

Original story: Eje Prime (by C. Pareja)

Translation: Carmel Drake