Logistics confirms top position in asset class ranking

Investments in logistics real estate were able to successfully defend their top position in 2024, which they achieved for the first time in the previous year. The nationwide transaction volume amounts to €6.87 billion, which not only means the top spot among the asset classes, but also a revenue share of 27% of total investment turnover. This is also an absolute top value in a long-term comparison. At the same time, the result increased the previous year's sales by 13%. The fact that the logistics markets are currently very attractive from an investor's point of view is also shown by the fact that the investment turnover achieved is only seven percent below the ten-year average. In no other asset class is there a value even remotely comparable. This is the result of the analysis by BNP Paribas Real Estate.

It is also particularly pleasing that the positive revenue development is driven by both individual transactions (share: 52%) and portfolio deals (share: 48%). "Logistics properties occupy a prominent position, especially in the portfolio segment. With an investment volume of just over €3.3 billion, they are responsible for 54% of all portfolio transactions in the commercial investment market. At the same time, they were able to increase their absolute sales volume with parcel sales by more than half compared to the previous year," explains Christopher Raabe, Managing Director and Head of Logistics & Industrial at BNP Paribas Real Estate GmbH.

As expected, the slightly lowered key interest rates of the central banks have not yet been directly reflected in the purchase price levels. As a result, stabilization was also predominantly observed in the fourth quarter, so that most yields did not change. The net prime yields for logistics properties continue to be 4.25% on average for A-locations.

Foreign investors particularly active

Of the total turnover, a good €1.7 billion is attributable to the large logistics hubs. This corresponds to a share of around a quarter of the transaction volume. With the exception of Munich and Stuttgart, more capital expenditure was recorded in all market regions than in the previous year. The most investments were made in Hamburg with €456 million and in Düsseldorf with €318 million. Results of around €200 million each were achieved in Berlin (€223 million), Cologne (€203 million), Frankfurt (€202 million) and Munich (€183 million).

Investor interest, especially in large-volume properties and packages, has increased noticeably. A total of 19 deals in the three-digit million range were recorded. A good 94% of this is accounted for by foreign buyers. This suggests that large-volume logistics transactions in particular continue to be an extremely attractive asset class for foreign investors. In relation to the total volume of logistics investments, the proportion of foreign investors is a good 75%.

Prospects

The logistics markets have benefited by far the most from the upward trends and the improvement in sentiment in the investment markets. It is particularly pleasing that this trend accelerated in the course of 2024. In the fourth quarter alone, €2.47 billion was invested, which corresponds to a share of 36% of the annual result. It is particularly noteworthy that the ten-year average of the fourth quarter was also exceeded by 6%.

This development suggests that the price discovery phase is likely to be completed and that buyers and sellers have agreed on a price level that is acceptable to both sides. This thesis is supported by the very high proportion of foreign investors, which at 75% has one of the highest values ever recorded. Internationally active investors in particular expect considerable future value appreciation potential and consider the current phase to be extremely good timing for entering the German logistics market.

"Against this backdrop, there is much to suggest that the logistics investment markets should continue to benefit from the overall better mood and rising purchase prices in conjunction with further falling key interest rates in 2025. This means that there is hardly anything to prevent a renewed increase in transaction volume. However, it remains to be seen how high this will be and depends not least on Germany's economic development," says Christopher Raabe.

In addition to a higher investment volume, declining returns can also be expected across the board. This is supported above all by the presumably further decline in key interest rates and increasing competition on the investor side. The most likely scenario is yield compression of 10 to 20 basis points over the course of the year.