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2 CBRE | JANUARY 2014
EUROPEAN LOGISTICS INVESTMENT BRIEFING Property EU, 28 th January - - PowerPoint PPT Presentation
EUROPEAN LOGISTICS INVESTMENT BRIEFING Property EU, 28 th January - - PowerPoint PPT Presentation
EUROPEAN LOGISTICS INVESTMENT BRIEFING Property EU, 28 th January 2014 AGENDA Investment activity & pricing Rents and occupier demand Occupier market issues Conclusions 2 CBRE | JANUARY 2014 INVESTMENT ACTIVITY &
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INVESTMENT ACTIVITY & PRICING
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4 CBRE | JANUARY 2014
5 10 15 20 25 30 35 40
Other Hotels Retail Warehouses Light Industrial Retail High St Residential Shopping Centres Logistics Office
%
2012 2013
“IN EUROPE, WHICH SECTOR IS THE MOST ATTRACTIVE FOR INVESTMENT PURCHASES?”
Source: CBRE Research
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5 CBRE | JANUARY 2014
INDUSTRIAL PROPERTY INVESTMENT, EUROPE
5 10 15 20 25 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013*
Billion €
Source: CBRE Research Note: * Provisional and may be subject to small revision
Highest annual total since 2007
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6 CBRE | JANUARY 2014
25 50 75 100 125 150
All retail All office All property Germany France UK All industrial Netherlands/Belgium Sweden CEE Southern Europe
> 200%
CHANGE IN INVESTMENT (%), 2013* VS 2012
Source: CBRE Research Note: * Provisional and may be subject to small revision
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7 CBRE | JANUARY 2014
0.0 2.0 4.0 6.0 8.0 10.0 12.0 Dec-88 Dec-89 Dec-90 Dec-91 Dec-92 Dec-93 Dec-94 Dec-95 Dec-96 Dec-97 Dec-98 Dec-99 Dec-00 Dec-01 Dec-02 Dec-03 Dec-04 Dec-05 Dec-06 Dec-07 Dec-08 Dec-09 Dec-10 Dec-11 Dec-12 Dec-13
Retail Industrial Office German 10Y Bund
580 BPs
CBRE EMEA PRIME YIELD INDICES
Weighted Average Prime Yield (%)
Source: CBRE Research
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8 CBRE | JANUARY 2014
- 150
- 125
- 100
- 75
- 50
- 25
25 50
Dublin London Manchester Paris Lyon Stockholm Madrid Milan Hamburg Frankfurt Lisbon Munich Warsaw Brussels Moscow Rotterdam Amsterdam Budapest Barcelona
PRIME YIELD SHIFTS (BPS), 2013
Source: CBRE Research
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9 CBRE | JANUARY 2014
Present yield relative to high and low of current cycle (%)
PRIME WAREHOUSE/LOGISTICS YIELDS
Source: CBRE Research
4.00 5.00 6.00 7.00 8.00 9.00 10.00 London Frankfurt Hamburg Munich Stockholm Amsterdam Rotterdam Brussels Paris Manchester Warsaw Prague Dublin Milan Madrid Barcelona Lisbon Budapest Current yield Cyclical low Cyclical peak
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10 CBRE | JANUARY 2014
INDUSTRIAL CAPITAL VALUE GROWTH, EMEA
Source: CBRE Research
- 25%
- 20%
- 15%
- 10%
- 5%
0% 5% 10% 15% 20% Q4 2002 Q4 2003 Q4 2004 Q4 2005 Q4 2006 Q4 2007 Q4 2008 Q4 2009 Q4 2010 Q4 2011 Q4 2012 Q4 2013 Rental Growth Yield Impact
Change per Annum (%)
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11 CBRE | JANUARY 2014
Industrial ex-UK (sub-Sectors)
EVM EUROPEAN VALUE INDICES
50 60 70 80 90 100 110 Q4 07 Q2 08 Q4 08 Q2 09 Q4 09 Q2 10 Q4 10 Q2 11 Q4 11 Q2 12 Q4 12 Q2 13 Industrial ex-UK Logistics Light Industrial
Source: CBRE Valuation
Q4 2007 = 100
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RENTS AND OCCUPIER DEMAND
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13 CBRE | JANUARY 2014
- 15.0
- 10.0
- 5.0
0.0 5.0 10.0 15.0 20.0 Dec-02 Dec-03 Dec-04 Dec-05 Dec-06 Dec-07 Dec-08 Dec-09 Dec-10 Dec-11 Dec-12 Dec-13
Retail Index Industrial Index Office Index All Property Index
+1%
EMEA PRIME RENT INDICES
Y-O-Y Change (%)
Source: CBRE Research
+5% Year-on-Year
- 7%
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14 CBRE | JANUARY 2014
Y-O-Y Change (%)
- 15
- 10
- 5
5 10 15 20 25
Valencia Milan Helsinki Marseille Glasgow Birmingham Zurich Gothenburg Amsterdam Oslo
PRIME RENTAL GROWTH, 2013
Source: CBRE Research
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15 CBRE | JANUARY 2014
TAKE-UP: BIG POSITIVES, BIG NEGATIVES
Industrial / logistics take-up % chg 2013 vs 2012
- 80%
- 60%
- 40%
- 20%
0% 20% 40% 60% Milan Warsaw Amsterdam Budapest Paris Rotterdam Frankfurt Europe UK Prague Bratislava Lisbon Dublin
Source: CBRE Research
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16 CBRE | JANUARY 2014
KEY ECONOMIC INDICATORS
- 15.0%
- 10.0%
- 5.0%
0.0% 5.0% 10.0% 15.0% 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
EU Exports World Industrial Production EU Imports
% Change
Source: Oxford Economics
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17 CBRE | JANUARY 2014
RECOVERY BUILDING.....
- 3.0%
- 2.0%
- 1.0%
0.0% 1.0% 2.0% 3.0% 4.0% Italy Spain Europe France Germany UK USA World 2013 2014 2015
2013-2015
Source: Oxford Economics
Real GDP Growth, 2013 – 2015
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18 CBRE | JANUARY 2014
UK Logistics Availability, 2009 – 2013
10 20 30 40 50 2009 2010 2011 2012 2013 million sq ft
Secondhand New / Early Marketed
- 71%
CBRE Logistics data covers units of 100,000 sq ft only
…..AND SHRINKING SUPPLY
Source: CBRE Research
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OCCUPIER MARKET ISSUES
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20 CBRE | JANUARY 2014
– Supply chain efficiencies vital in a slow upturn – ...and to deal with growth in online retailing – Capex decisions: systems, equipment, people, buildings.... – Innovation in order fulfilment – More orders, more combinations, more complexity – Centralisation of systems for inventory control: big data – Same-day delivery: can’t afford to, can’t afford not to – Absorbing returns – Quest for seamless omni-channel supply chain – Premium on accessibility, handling capability, throughput, process complexity
SUPPLY CHAIN CHALLENGES
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21 CBRE | JANUARY 2014
THE DEMAND “DUMBBELL” XXL warehouse platforms in strategic locations Urban logistics & parcel delivery centres
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22 CBRE | JANUARY 2014
MAIN ADVANTAGES TO AN OCCUPIER OF OPERATING FROM AN XXL-WAREHOUSE
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Centralisation of operations Economies of scale Reduced transport Reduction in unit storage costs Image/profile
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23 CBRE | JANUARY 2014
– Long production cycle / BTS – Unusual locations – Large lot size / single asset risk
XXL WAREHOUSES
– 14% of the market and rising – Centralisation of inventory – More efficient network footprint – Accommodate value-add services – Simpler information control and order fulfilment – Reduce pressure on storage space in stores – Integral part of supply chain > longer leases
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24 CBRE | JANUARY 2014
PARCEL DELIVERY CENTRES
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25 CBRE | JANUARY 2014
– Rapid transfer of goods; minimal or no storage – Reduction in inventory holding and handling costs – Faster process speed through the supply chain – Enhanced customer service – “Final mile” solution close to end point of consumption
PARCEL DELIVERY CENTRES
– Site requirements compete with other uses – Low site coverage (30-35%) – Market unconvinced by evidence of rental premia – Limited scale of capital market: opportunity or risk ?
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CONCLUSIONS
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27 CBRE | JANUARY 2014
– Strong investment tilt towards logistics last year – Yields narrowed but spreads still large – Rental growth starting to emerge in the stronger markets – Far-reaching and rapid supply chain challenges – Understanding occupiers in a moderate upturn – Emerging investment niches – Pricing specialisation / single asset risk – First mover advantage: opportunity or risk?
CONCLUSIONS AND ISSUES
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