Logistics investment fell by 26% compared to H1 2019
The investment market has also been affected by Covid-19. Capital markets all but ceased during the height of lockdown as investors struggled to undertake due diligence and underwrite rental growth assumptions. However, as it became clear that inspections and surveys could be carried out whilst maintaining social distancing and that occupiers were still taking space at pre-Covid rental levels, confidence returned, and the rate of transactions continued to increase, says Will Laing, Savills Research Analyst, for The Logistics Point.
Given the market turbulence across all sectors and high levels of uncertainty, it is encouraging to report that logistics investment volumes have reached £1.12bn for H1, a fall of just 26% when compared with H1 2019.
In terms of pricing, during lockdown Savills prime yields have moved out 25bps and now stand at 4.50% for prime single let logistics units and 4.25% for multi-let industrial estates. However, as lockdown has been eased and market activity has returned, positive sentiment and competitive tension is again putting negative pressure on these yields.
Throughout this period one thing has remained certain, that industrial and logistics is still a top pick for investors, especially due to the expectation that it will continue to be resilient and outperform in the current market.
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