28 February 2015 | Online since 2003



27 January 2014|Finance,News,Property News

Warehouse investment increased 50% in 2013


2013 was a record year for distribution warehouse investment with approximately £2.5 billion transacted, which is an increase of nearly 50% on 2012, according to research from Savills.

The international real estate advisor notes that this rise was driven by a continued growth in demand for the sector from an increasingly diverse investor group from the UK and overseas.

James Williams, investment director at Savills, comments: “Interest from investors in the logistics sector has gained incredible momentum over the last 12 months. While UK funds and REITs have dominated the market, we are also seeing increasing interest on a global platform from a diverse range of buyers from the USA, Russia, the Middle East and South Africa.

“This rise in demand has inevitably generated strong yield compression and resulted in distribution warehouses outperforming all other property sub-sectors in 2013, according to IPD, with returns of 15.2% being delivered.”

Research highlights yield compression was visible across all income lengths in 2013 with short to medium term income deals moving in by up to 150 bps on prime property, compared to the previous year.

This is, in part, a reflection of a rise in confidence from investors in the ability to re-gear / re-let a property against continued growth in the cost of moving and reducing supply of available alternative properties.

Key deals that took place in 2013 include: ProLogis’ acquisition of a £247m portfolio from London Metric, Gazeley Properties’ funding of John Lewis at Magna Park in Milton Keynes to Aviva Investors for £76.5 million with a niy of 4.90%; Henderson’s acquisition of RD Park, Hoddesdon for £74.5m at 6.80% niy; the sale of Next’s Distribution Centre in Rotherham to Legal & General for £89.9m at 5.50% niy and the purchase of Marks & Spencer Distribution Centre in Castle Donnington by Tritax Big Box REIT for £82.57 million, reflecting a niy of 5.20%.

Andrew Bull, industrial director at Savills, says: “Looking forward we anticipate investor demand will remain strong for the logistics sector, buoyed by a continuing improvement and confidence in the occupational markets. In addition, the absence of a loosening in supply of suitable investment stock will ensure yields remain robust during 2014. Further yield hardening is possible over the short term however we do not expect to see it on the same scale as 2013.”

Download



Comments


No comments posted yet. Be the first to post a comment

To post comment without approval login or register

Display name

Please enter your name

Email (optional)
Comment

Please enter your comment

Post Comment

Your comment submitted successfully.Please wait for admin approval.

Some error on your process.Please try one more time.



Jobs


24 February 2015
Locum Intern in Small Animal Orthopaedics
Job Ref: A-587684/JAC This clinical training post will be based in the Small Animal Teaching Hospital at Leahurst on the Wirr...

17 February 2015
Medicine Veterinary Nurse
Are you a highly motivated, experienced RVN looking for an exciting opportunity? As a result of maternity leave we are lookin...

11 February 2015
Agricultural Property Lawyer
This highly-regarded and established firm based in Shrewsbury in Shropshire is looking to appoint an Agricultural Property So...

26 February 2015
Tractor Driver/General Stockperson
Science, Agriculture & Engineering. School of Agriculture, Food & Rural Development. Tractor Driver/General Stockpers...

19 February 2015
Database Administrator
Point Farm and Configuring the necessary required components. Are you an ambitious and focused IT professional, who ready to ...




Top stories you may have missed
2 February 2015 | Arable
Is EU membership damaging UK farming?

Is EU membership damaging UK farming?

Membership of the EU is damaging the British farming industry, according to...


29 January 2015 | Machinery and Equipment
Drones 'rapidly changing' agriculture

Drones 'rapidly changing' agriculture

BASIS has launched an accreditation for pilots of Unmanned Aerial Systems (...


23 January 2015 | Arable
UK wheat yields have potential to double

UK wheat yields have potential to double

UK wheat yields have theoretical potential to more than double over the nex...


23 January 2015 | Machinery and Equipment
Crowds flock to LAMMA 2015

Crowds flock to LAMMA 2015

Britain’s farmers flocked to Peterborough for the first day of LAMMA’15 to ...


22 January 2015 | Cattle
Don't blame supermarkets for milk crisis...

Don't blame supermarkets for milk crisis...

The crisis in the dairy industry is not the fault of supermarkets, accordin...


16 January 2015 | CLA
Families affected by HS2 face 'major wor...

Families affected by HS2 face 'major wor...

Transport Minister Baroness Kramer visited three rural businesses in Cheshi...


16 January 2015 | Machinery and Equipment
John Deere unveil new 6R tractor range

John Deere unveil new 6R tractor range

Spearheading the John Deere range of mid-size tractors from Mannheim, the n...


14 January 2015 | Animal Health
Monthly TB checks more effective than ba...

Monthly TB checks more effective than ba...

Regular testing for bovine TB could significantly reduce the number of infe...


12 January 2015 | News
Government regulations hampering UK agri...

Government regulations hampering UK agri...

Single-issue policy-making threatens to hamper, not help, the progress of U...


8 January 2015 | Cattle
2015: The year ahead for the beef market

2015: The year ahead for the beef market

2014 has been a “rocky old year” for the beef industry but better prices ar...