What goes up comes down and, after the party, it’s hard to escape the hangover. In the real estate sector, the logistics sector was positioned as the big winner of the pandemic, boosted by the rise of electronic commerce and achieved a record investment figure worldwide, up to 277,000 million euros in 2021. However, the sector did not It has managed to stabilize in the boom and has cut its investment by 15% in 2022, up to 235,000 million euros, according to data from the EY consultancy.
Europe, Africa and the Middle East (Emea, for its acronym in English) have been the protagonists of the fall in investment in the sector, with a year-on-year decrease of 22%, up to 54,000 million euros, while America has more cushioned the blow, with a reduction of 11% compared to the previous year, up to 133,000 million euros. Asia Pacific, the industry’s smallest market, posted a 20% drop to $35 billion.
With the decline in investment has come the decline in asset valuation. The net asset value (NAV) has fallen in all sectors with respect to the price of the FTSE EPRA index, a stock index that groups the price of the largest real estate companies of the selective Epra, Brussels, Ftse, United Kingdom and Nareith from the United States. Logistics assets recorded a 30% drop at the end of 2022, although it was not the most pronounced: residential fell 59%, retail 48% and offices 47%.
“Financial rigidity and slower-than-expected growth in e-commerce are responsible for the impact on logistics after the recovery from Covid-19,” says the British consultancy in its report The Logistics Property Telescope. In Europe, the drop in activity in the sector has also had to do with macroeconomic uncertainty, according to the consultancy, which describes European investors as “worried” about the rise in empty offices.
Activity has fallen in all the major European markets, including Spain. In fact, the largest logistics market on the continent, the United Kingdom, reduced its activity by 20.5%, recording an investment volume of 17,518 million euros. The British market accounted for more than half of the main operations on the continent, 57%.
In Germany, where the capital allocated to logistics rose to 7,117 million euros, it is in second place in the classification with a fall of 7.8%. France, the third market on the continent, recorded a slight decrease of 3%, with 5,433 million of invested capital. To find Spain you have to go down to sixth position.
The Spanish market concentrated in 2022 in 5% of the logistics investment in the continent, which means 2,700 million euros. Spain scores a predominant position in the southern European market along with Italy, which also accounts for 5% of European investment. (captained by France and Germany) and the 12.9 euros from northern Europe, driven by the United Kingdom and the Nordics.
In addition to being the market with the lowest income, it is the only one that has gone down in the last year. Prime rents have gone from eight euros per month per square meter to 7.5 euros per month per square meter. In Central Europe, rents for prime assets have gone from 8 euros per square meter to 10.5 euros per square meter, while the north has gone from 20.5 euros per square meter per month to 25 euros per square meter per month. month.
As a second market in Europe, Spain manages to cast one of its main companies among the biggest players in the sector. Merlin occupies the tenth position with 3.1 million square meters. The first is the logistics platform for the last mile of the US giant Blackstone, Mileway, which has sixteen million square meters. It is followed by Prologis, with fifteen million square meters, and Logicor, with 13.7 million square meters.
The next step in logistics
The runaway growth of logistics seems like a thing of the past, so the American consultancy recommends not wasting another second in the pandemic euphoria and facing the next growth lever: the last mile. High rental prices in cities are delaying the implementation of the last mile, but with the looming crisis, rents will fall and a more abrupt shift from retail to urban logistics may occur.
The consultancy estimates investment in the last mile worldwide at 6,300 million euros, of which 29% is invested directly in the urban fabric, that is, in the delivery area.
Another of the innovations that it proposes is the incorporation of drones in parcel delivery, since the pollution they emit is less than that of other modes of transport such as vans or even electric cars. However, the implementation of this technology has a stumbling block: the price. It is the most expensive way to deliver a package in the city due to the high labor cost, despite the minimal energy cost. Despite this barrier, the implementation of drone deliveries is ascending and has tripled in 2022. Most of them are carried out in the Aisa Pacífico region and there are a total of 1,400 deliveries.
