international investors are given nudges to buy logistics platforms in Spain. For each center that comes to market, with tenant included, there are around 20 binding offers of Reit’s and institutional funds. The market Spanish logistics is today one of the strongest in Europe, with a wide demand, a limited supply of land and buildings and income with room to grow. For the first time in the history takes the lead and becomes, together with the industrial sector preferred to invest, ahead of offices, residential, retail and hotels, according to the consulting firm CBRE. Even funds that were not traditionally investors of logistics, now they are.
The sector, which mark records in the past three years, exceeded 1,500 million euros in 2017, with a total of 27 operations. It was a figure never seen before. In the first nine months of the year accumulates to almost 850 million euros, according to Paul Mendez, national director Capital Markets at Savills Aguirre Newman. The accounts of CBRE speak of a volume of 1,100 million euros until September, with a 43% more compared with the same period of 2017 —regardless of the sale of the group Logicor to China Investment Corporation (CIC) in the second quarter, which were about 600 million in Spain—. And, according to the estimates of Pere Morcillo, director of Industrial and Logistics at JLL, 2018 could close in about 1,200 million euros. If finally low compared to the previous year may be due to the lack of offer for the give food to so many investors eager to purchase.
why the interest? Because it is the one that gives returns higher. “We talked about between 5% and 6%, while other sectors do not rise 3.5%”, says Alberto Larrazábal, national director of Industrial and Logistics in CBRE. “Institutional investors like our own, can find returns attractive and a collection of recurring revenues long-term income very interesting. For example, the yields prime shopping centers may be in the 4% or 4.50% per, offices around the 3,50%, but logistics is returns from 5,50% to 5,75%,” says Javier Martin, asset manager for TH Real Estate, which operates with its own capital from the pension fund of teachers in the united States and third parties.
trust is another stronghold. The tenants of the ships are large customers who demand logistic spaces to your goods, such as Carrefour, Inditex, Leroy Merlin, Amazon…But if there is anything that underpins your interest is the tremendous journey of ecommerce, which has transformed the logistics of a traditional one. “Many investors see it as a sector of the future, because you always need to store and distribute goods,” apostille Larrazábal.
Pere Morcillo, JLL, talks of a perfect storm: “there is an excess of foreign capital, the cost of money is low, there is little supply and the returns, although they have been revised downward due to the activity of buying and the shortage of product, are superior to those of more mature markets, such as Paris and Milan.”
One of the investors most active this year has been to Invesco, which has bought three centres in Madrid and Barcelona by 173 million euros. Also the background american Blackstone, which has acquired a portfolio of logistics-Lar by 120 million, as well as the Palm Capital, Segro, or Merlin Properties. Colonial has been made with the portfolio of Axiare. And by volume, the background british Tritax, which premieres in Spain, has purchased the logistics centre of Mango in Lliça DAmunt (Barcelona) for 150 million. “Although during 2014 and 2015, the strong activity of the Reit reflected a high volume of investment in logistics, from 2016 the institutional funds have been recovered from the limelight, concentrating more than 60% of the volume of investment,” says Mendez. And until you have taken out the leg funds asian sovereign wealth fund of Singapore (GIC) & CIC.
The average ticket of investment for the logistics plant is between 25 and 45 million euros. “The funds of TH Real Estate looking for a minimum investment from 15 billion”, says Javier Martin. A volume that know how to take advantage. The letter to the three Kings of the investor required size, location and a tenant solvent. “Have more appetite for large surfaces because the size position; looking for a minimum of 15,000 or 20,000 square feet,” says Shank.
In all property investment location is key, but in this much more. The radar is located in Madrid, Barcelona and its logistics environment. “The market of Madrid and its natural extension towards Castilla-La Mancha (Guadalajara and Toledo) along the A-2 and A-4 concentrates more than 50% of the total transccionado”, calculated in Savills Aguirre Newman. Although it is very polarized, from 2014 locations secondary of Zaragoza, Malaga, Valencia, Bilbao, Seville and Malaga also they fit. Matter construction quality and that it is a building new and modern.
But what matters really is who occupies the platform. “They want tenants are very solvent with long-term contracts, at least 10 years, which will ensure recurring revenue and to invest in technology and equipment in ships”, lists Morcillo to describe the operation ideal. The funds are also looking for land for “the development of product and standard of property dedicated to the last mile or urban logistics, making it clear that his strategy logistics has come to stay,” suggests Mendez
is This getting too far away from the boom? “There is more investor appetite for the big platforms that the interest of companies such as Primark to occupy a ship,” says Shank. However, it rejects the idea of a bubble. “The prices do not rise in an uncontrolled manner as happened in the residential, nor do the developers build any kind of soil without demur. In addition, financial institutions are more cautious when it comes to funding,” says Martin. Experts believe that the development of e-commerce to sustain the business.