The logistics market is thriving despite Covid
Following record volumes of transactions for 3 years in a row, there were high expectations for potential cyclical slowdown in take-up. Lockdown measures across Europe were thought likely to exacerbate the slowdown. These scenarios did not happen. Indeed, the logistics market even set a new record volume of transactions in Q1 2021 increasing by 19% in the 6 leading countries.
The COVID crisis was expected to put a stop to rental growth, but low vacancy and few developments enabled further increase in a number of markets during Q1 2021.
Industrial and logistics investment reached €10.5bn in Q1 2021 and is gaining market share against other asset types. Prime yields dropped across Europe during Q1 2020 by 15 bps on average over the last 3 months. Further yield compression is anticipated as competitive pricing remains tough.