1
European Industrial & Logistics Capital Marts Q4 2016 jll.eu/il © 2017 Jones Lang LaSalle IP, Inc. All rights reserved. The information contained in this document is proprietary to JLL and shall be used solely for the purposes of evaluating this proposal. All such documentation and information remains the property of JLL and shall be kept confidential. Reproduction of any part of this document is authorized only to the extent necessary for its evaluation. It is not to be shown to any third party without the prior written authorization of JLL. All information contained herein is from sources deemed reliable; however, no representation or warranty is made as to the accuracy thereof. Investment in European industrial and logistics markets in 2016 rose 5% on 2015, despite lower activity in the UK. Single assets remained highly sought aſter - they accounted for 60% of the market – but limited product availability meant the value of large lot sizes (>€ 100 million) was down 23%. YoY increase in 2016 (Q1-Q4) increase on 5-year average YoY in Continental Europe YoY in Southern Europe YoY in‘non-core’ CEE markets YoY in ‘core’ CEE markets (Czech Republic, Hungary, Poland) YoY in volume terms on 5-year average of capital invested in 2016 sourced outside of Europe YoY change in capital from Asia Pacific – which in 2016 became the leading international investor group Share of overall European commercial real estate investment 5 % 42 % 10 % YoY in UK due to rising investor caution around Brexit uncertainties but still outperforming other sectors with total UK investment volumes down by 37% YoY 20 % 14 % 318 % >€100 23 % million 63 % 33 % 102 % 183 % 160 % 36 % YoY in Germany The industrial and logistics asset class in Europe continues to attract a high level of international capital from outside the ‘region’. Our average, European prime logistics yield reached a historic low at the end of 2016, but prime yields could still go lower in certain core markets due to strong demand and limited stock. Portfolio transactions remained a major feature of the market with a 43% share of the market. 12 single assets in 2016 Down YoY in volume terms share in portfolio transactions in 2016 portfolio deals >€100 million in 2016 YoY in volume terms in 2016 European prime logistics yeild *excluding Moscow QoQ YoY largest portfolio traded for >€2 billion More than 200 single assets in 2016 between €10-25 million up 9% YoY in volume terms 43 % 19 56 % 17 % €2bn of total 2016 portfolio transactions involved capital sourced outside of Europe 5.60 %* 10bps 30bps Over the quarter, further yield compression was recorded in Amsterdam, Budapest, Prague and Rotterdam Philip Marsden Head of EMEA Industrial & Logistics Capital Markets [email protected] Nick Jones Director - EMEA Capital Markets [email protected] Tom Waite Director - EMEA Capital Markets [email protected] Alexandra Tornow EMEA Industrial & Logistics Research [email protected] For more information, contact: About JLL Capital Markets JLL Capital Markets is an independent leader in commercial real estate investment advice. Over 1200 professionals work withclients of all types, to go beyond the property transaction, and to shape the services they need to gain The Edge in theirinvestments. In our experience, having a different perspective reveals new opportunities. JLL combines financial expertise withaccess to global capital and deep property insight to give our clients the confidence to see the world differently. That’s The Edge. Transaction activity in the UK (the main driver of volumes) was down – but Continental Europe picked up speed driven by notable increased in Germany and Southern Europe; elevated growth in CEE markets largely attributable to the exceptional P3 deal in Q4. 25 % Whilst Germany, the UK and France still attracted the lion’s share of portfolio investment in 2016, investment in portfolios in ‘core’ CEE markets (Czech Republic, Hungary, Poland) and smaller CEE markets, such as Slovakia and Romania, also increased, thanks largely to the exceptional P3 purchase.
