Commercial property investment strengthens in UK logistics sector

The UK has seen a recent strengthening in commercial property investment volumes in the logistics sector, new research has found.

A study by CB Richard Ellis (CBRE) discovered that the logistics sector now accounts for around ten per cent of the European property investment market compared with only six per cent in 2006.

According to CBRE, changes in the industrial sector's occupational and investment characteristics have made it more attractive to institutional investors and have clearly affected pricing.

The commercial property specialist also pointed to recent growth in the number and size of pan-European institutional funds and investors now looking at the opportunities offered by European logistics property.

James Markby, director of European industrial and logistics at CBRE, said: "Although it has generally lower rental growth characteristics, the fact that the sector's income return has been more than 1.5 per cent higher than the all-property average since 2001 is an attractive feature in an uncertain economic environment."

It was also noted that the UK has been a particularly strong performer in terms of logistics property investment, accounting for over half of last year's total European industrial investment activity.

Meanwhile, writing for Hemscott.com recently, Richard Romer-Lee, founder of Old Broad Street Research, claimed the UK's commercial property market has witnessed an extraordinary recovery since the depths of the credit crunch.