Valencia: logistic yields should compress down to 6%

Valencia: logistic yields should compress down to 6%

From 2019 to 2020, the yields’ trend is clearly for compression. The latest report from Triangle Real Estate showed a 35 base point drop in this indicator, is set at around 6.25%. If for 2021 expectations are for stabilisation, for the following years it is expected to drop even more until it reaches 6%. These predictions show that, once again, logistics is consolidating as one of the «more secure and attractive real estate segments for investors, within a set of low-interest rates and decreasing returns on other segments», it can be read in a release.

This indicator is joined by revenues, which according to Triangle REM, should be stabilised at 4.30 euro/sqm/month, «a number which has been repeated for several quarters and which confirms the trend for offer-demand stabilisation expected for the coming months», it explained.

Logistics dynamics should stabilise in 2021

Apart from confirming that the logistic market is a «safe and profitable option for investors and operators», 2020 also highlighted Valencia’s importance as a logistic hub of strategic interest for all different agents.

The latest market data showed that the segment closed 2020 with contracting slightly above 135.000 sqm in terms of built area. Despite this indicator has gone back to 2018 levels, 70% of this contracting was carried out during the second semester when the economy started to recover after months of paralysation.

This behaviour brings, according to the experts at Triangle REM, the guarantee that throughout 2021 there will be a stabilisation between offer and demand and that the available stock registered at the end of 2020 will be absorbed with the conclusion of several «risky» developments which increased the vacancy rate from 1.81% in 2019 to the current 6.15%.

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