Have Logistics Peaked?

With four excellent panellists, learn: repricing of logistics as an asset class, what new transactions we can expect in Q4, the impact of the reshoring of supply chains and much more.

Raimund Paetzmann, Vice President Logistics Network Expansion and Real Estate at Zalando SE
Brian Kieran, Senior Vice President and Head of GLP Europe Fund Management.
Charles Allen, Head of UK Real Estate, Fiera Real Estate UK
Alistair Calvert, CEO of Clarion Partners Europe

Evelyn Lee, Editor, PEI

To help navigate to relevant bits of the session, I’ve added timings to the key takeaways below.

  • There is a strong correlation between interest rates and yields, with a high level of certainty, meaning logistics could still have a while to go until they peak  (5 minutes)
  • Logistics assets got too hot and were 10% higher than what they should have been (7 minutes)
  • The underlying supply/demand imbalance is driving up rental growth in portfolios (8 minutes)
  • During the session there was a contrast between investor/occupier perspectives. From an occupier perspective, it was argued we have a very nervous market especially given the consumer crisis, creating an unhealthy environment which needs to settle before we reach normal fundamentals. On the contrary from an investor perspective, it was argued rental growth could continue for many years and take a while for the market to settle in terms of values given the huge increases in interest rates (13 minutes)
  • When looking at the rental market, occupier needs are paramount. Good landlords, renewable energy and ensuring wellbeing of the building are meeting the clients needs, can have a big positive impact (20 minutes)
  • Current market is short of labour, hindering further growth and occupier demand (21 minutes)
  • Secondary locations that weren’t on the map 15 years ago, are now looking attractive due to cheaper labour costs despite the increase in transport costs (22 minutes)
  • A huge amount of carbon usage is used for construction, meaning it is difficult to achieve a zero-carbon building. Despite this, with the help of solar panels it is possible for buildings to produce more power than they use (35 minutes)