International funds lead logistics investment in the first quarter

International funds lead logistics investment in the first quarter

Despite the fact that the real estate sector has been shaken in recent months by the changes in contracting caused by the rise in interest rates, it is expected that the demand for warehouse rental will continue for the rest of the year, which will lead to a rise in rents. According to the predictions of Proequity, a leading real estate consultancy, the central area and Catalonia will be the most affected by this, especially the latter, where the vacancy rate stood at 3%.

Although it is true that the increase in the rental of logistics warehouses will not be temporary, due to the fact that the demand for them is currently stable, the vast majority of logistics operators are optimistic. In this sense, experts from Proequity point out that investors are willing to take on more risk, as in communities such as Catalonia, in the quality warehouses, in the first and second metropolitan area, there is less than 2.27% of available space. This is because the higher cost of financing, as well as the increase in construction costs, has led to the delay of projects that were planned for the first half of the year.

Investment in the first quarter of this year was similar to the average volume transacted in the first quarter of the last five years. As expected, 90% of the investment was led by international funds together with core and core+ assets, the safest assets in the market, according to sector studies. Furthermore, according to this same study, one of the great milestones for the logistics market is that, at least for the time being, the expansion of prime yields, which is a profitability requirement when buying an asset, has slowed down. Currently, they are at 4.75%, both in Madrid and Barcelona, which is 100 basis points more than a year ago, the last quarter before the European Central Bank (ECB) changed its monetary policy.

From ProEquity, they point out that, during the last six months, there has been a slowdown in investment activity due to the economic situation. In addition, according to experts from the consultancy firm, the rental market has shown greater dynamism than the sale and purchase of assets, especially in Barcelona. "This scenario, added to the limited supply, intensified by inflation, the slowdown in construction and the limitation of speculative projects, will result in continued upward pressure on rental prices in 2023," says David Martínez, managing director of ProEquity.

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