Logistics real estate: an underestimated asset class

Anyone who is not professionally involved in real estate investment may not even have it on their radar: Logistics and industrial space as a capital investment in Germany. Yet logistics parks, distribution centers and similar properties are currently the asset class of choice for real estate professionals, according to a recent survey by data room provider Drooms: 34 percent of respondents expressed their intention to invest in industrial and logistics properties this year. This puts the asset class well ahead of residential real estate (20%), healthcare real estate (10%), offices and hotels (9% each) in terms of popularity.

Rents rose significantly in the first quarter

And rightly so, as Lukas Trautmann, Team Leader Research at Engel & Völkers, points out: “The outlook for investments in industrial and logistics properties is positive. Both prime and average rents rose in the first quarter of 2024, especially in A-locations.” This can be seen most clearly in Munich: Both average and prime rents recorded an increase of EUR 1.50 per square meter to EUR 8.70 and EUR 10.50 respectively (compared to the same quarter of the previous year). Further increases in rents for industrial and logistics properties are expected in most German regions over the course of the year, according to Trautmann. However, they are likely to remain within the range of the inflation rate.

Investment via direct purchase or real estate fund

There are two main options for investing in industrial and logistics real estate: The first is the direct purchase of a property, which is generally out of the question for non-professional investors. The second option is to invest in the industrial and logistics real estate asset class via real estate funds with a corresponding focus (April 25, 2024)