European, Middle East and African (EMEA) industrial property sectors continued to grow near the end of 2013, surpassing industry expectations.
According to reports from Cushman and Wakefield, industrial investment in EMEA rose 33 per cent between the third and fourth quarter of 2013. Market share hit 9.8 per cent at the end of 2013, in comparison to 7.9 per cent the previous year.
In 2013, the industrial sector outperformed the wider market, with volumes up by 57.4 per cent compared to the total market gain of 27.3 per cent, which saw retail at 19 per cent and offices at 22 per cent.
“With nothing short of a new industrial revolution now underway as multichannel retailing and changes to the supply chain impact, what we are seeing is not just a cyclical recovery but a major structural change and investors increasingly see industrial property as offering real growth potential for the future,” says Nick Jones, head of EMEA industrial investment at Cushman and Wakefield.
Domestic and international investors are keeping demand strong. Though North American investors were among last year’s key moves, Asian and European buyers also had a strong presence on the market.
David Hutchings, head of EMEA investment strategy at Cushman and Wakefield, indicates that the growth of the market for occupies, developers and investors is part of a global trend that is being driven by the growth of on and off line trading. He says that the industrial market expansion is likely to continue to outpace other sector, with volumes expected to rise 19 per cent in 2014.
There is increasing demand for modern facilities as businesses are investing again, while logistics spending and outsourcing increases. As a result, there is an increasing demand for new types of distribution space such as cross-dock facilities.
For the industrial sector, investors are focused on the United Kingdom, France, Germany and Sweden — these four markets held a 70.4 per cent share of the sector in 2013. However, with an increase in demand for properties in Russia, the Netherlands and Norway, the market share for the top four markets was down from 71.8 per cent in 2012. Mid-markets, including Italy, Czech Republic and Denmark, saw some of the strongest increases.
