Industrial Investments in Europe are soaring.

 

For the first half of this year, direct investment in European industrial and logistics property reached €6.0 billion, a 57 percent rise over last year and the largest investment level for a half since 2007. doha property

According to the most recent data from Jones Lang LaSalle, direct investment for the first six months was 54 percent higher than the five-year first-half average.

In 2013, the company expects direct investment volumes in industrial and logistics property to surpass €10 billion, which would be the third-best full-year result ever.

According to Tom Waite, director European capital markets at JLL, "we have seen sustained growth in investor demand for logistics and industrial investment opportunities thanks to good income returns over the last 18 months." "We're beginning to see this enthusiasm translate into increased transaction activity and investment volume."

In the second quarter, investment volumes totaled €2.8 billion, up 17% from the previous year. Direct investment rose by 40% in the first quarter, excluding the €1.2 billion portfolio deal between Prologis and Norges Bank.

The United Kingdom, France, and Germany, Europe's main markets, announced a 21 percent increase in investment in the first half of this year compared to the previous year. However, investment remained flat in the second quarter as investors broadened their concept of "heart" to include other countries, according to JLL.

According to the company, there is a shortage of prime property in the logistics and manufacturing sectors.

"This has kept pricing pressure on, and in the second quarter, after three consecutive quarters of no improvement, we saw the first European yield compression," Alexandra Tornow, associate director EMEA logistics & industrial research at JLL, said. "However, as continued healthy occupier demand leads to new growth, there is now increasingly more investible stock coming onto the market."

Birmingham, London, and Moscow, as well as many markets in France and Germany, have seen prime logistics yields compress.

Capital sourced outside of Europe increased to more than €1 billion in the first half of this year, up 37% from last year and 21% higher than the five-year first-half average.

For the first year, logistics and industrial investment accounted for 10% of total commercial property investment, up from 8% on average over the previous five years. Overall, commercial property investment in Europe increased by 13% in the second quarter of this year compared to the same period last year, with deals hitting a five-year high.

 

In London, a new trend in home sales is emerging.

For the past three years, historic price rises in London's most affluent neighbourhoods have dominated home sales. However, revenues are now being driven by less expensive regions.

According to a study released today by Knight Frank, property prices in the greater London area are 8.1 percent higher than a year earlier, while prime central London prices are just up 7%.

Property prices in prime central London are still up 4.8 percent for the year, and are more than 60 percent higher than the March 2009 market low.

However, the majority of the price rises are in the sub-£1 million and £1 million-£2.5 million price ranges, which are up 8.7% and 7% year-to-date, respectively. In 2013, prices in the £5 million to £10 million range rose by just 2.6 percent.

Prices are still growing, but Knight Frank concludes that "there are signs that buyers are becoming more resistant to continued price rises, especially at the top of the market."

According to the consultancy, there is still a lot of interest in London. According to Knight Frank, the number of new applicants is up 33.9 percent from a year earlier, and viewings are up 18.5 percent.

Meanwhile, so far this year, rents in prime central London have fallen by 2.5 percent.

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