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Tag: colliers

DCs Need People and Power

Posted on by David Priestman

Brokers and commercial estate agents play an important role in the logistics infrastructure landscape. David Priestman met with Colliers’ Rob Whatmuff (pictured) and Andrea Ferranti at UKREiiF in Leeds.

A major player in the industrial property sector, with around 70% of this activity in warehousing, particularly national distribution centres (NDC) and retail DCs (RDC), Colliers act as a broker to bring both the developer and the occupier customer to the table. “So we see both sides,” Whatmuff explains. “The scale is for larger and larger hub and spoke facilities, up to 330,000 sq.ft.”

60% of the company’s projects are for the landlord of the property – a developer or investment fund – with 40% being for the end-user occupier or third party logistics operator. End-user customers include ASDA, DHL, Howdens, Superdry, Aldi and Electrolux. Segro and Prologis are clients as developers. The iPort in Doncaster is one successful multimodal hub scheme, with multiple occupiers and rail connectivity, that Colliers has been involved with.

I asked Whatmuff what specific trend he is seeing in warehousing. “From an investor perspective mezzanines and maximising the 3D space usage of a DC makes them more attractive than low-rise, single-story sheds. We’re looking for more RDCs, mapping locations and availability, deliverability and financing.”

Making a good impression

Planning issues are always a factor in determining the speed of delivery of a new distribution centre. “Sometimes there is a negative reception to an application for a warehouse,” he adds. “Residential concerns are overused and we work to demonstrate that our developments are positive for the community.”

Ferranti’s role is in data and research. He advises clients about national locations based upon analysing parameters such as vacancy rates, take-up, suppliers, tenant profiling and size bands. That provides the valuable insight necessary to make the right investments. “Unit type is either speculative or dedicated development,” he says. “I’m studying the demand from occupiers, short or long term, as well as sustainability issues and the use of renewable energy.”

“People and power are always key when selecting the right location,” Whatmuff concludes. “How tight is the labour market there? What is the power availability on the site, particularly when considering electric vans and lorries?” All these factors are taken into account.

Warehouse take-up returns

Take-up of warehouses of 100,000+ sq. ft has returned to a more stabilised level, in line with the long-term pre-Covid H1 average of 14m sq. ft, says Colliers. According to the firm’s latest Industrial & Logistics Market Pulse Mid-Year analysis, between January and June 2024, take up of industrial space of 100,000+ sq. ft reached 13.3m, up 4.4 per cent year-on-year, across 53 deals. In 2024 the industrial market has seen resilient take-up through mega-sized deals. Last year for the same period the market had processed 60 transactions, which corresponds with the ten-year H1 average for deals pre-Covid of 62.

Across the whole market second-hand space was the most popular warehouse product in H1 with 37 per cent of total take-up being in this category. Some 31 per cent of take-up was in build-to-suit units for occupiers and the remaining 32 per cent was for speculatively developed space. The most acquisitive occupiers in H1 2024 were storage and third party logistics suppliers (46%), followed by wholesale/retail (24%).

Andrea Ferranti, Head of Industrial Research at Colliers added: “We can see that due to the economic challenges of the last 18 months development of speculative supply has decreased and availability of prime warehouses is going to be impacted over the next 12 months. We’re anticipating that with improving market conditions and consumer sentiment, industrial occupiers will need to become more acquisitive once again to meet demand. However they could be facing a lack of good quality space, which could impact their corporate real estate strategies, particularly around ESG credentials, in the near future.”

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Research confirms UK’s logistics sector is buoyant

 

UK Entry via Acquisition of 2 Logistics Assets

Posted on by David Priestman

P3 Logistic Parks announces its expansion into the United Kingdom through the acquisition of two logistics assets from Segro, totalling 81,000 sqm of space in well-established locations. One asset is located in Crick and comprises around 36,000 sqm lettable area. The second asset with more than 45,000 sqm is located in Kettering.

Frank Pörschke, CEO of P3 Logistic Parks, commented: “The acquisition of these two logistics assets in the UK marks a significant milestone for P3, as it expands our operations into a key market known for its robust logistics industry. The country has always been a vital hub for international trade and commerce, and we are excited to offer our expertise and resources to meet the evolving needs of businesses operating in this region.”

The newly acquired logistics assets are strategically located within the “Golden Triangle” area and provide seamless connectivity to major transportation networks and key industrial centers in the UK. All units were developed from 2010 onwards to a modern Grade A institutional specification including BREEAM rating ‘Very Good’ and are fully leased out to three tenants.

P3 is partnering with Roebuck, an institutional Pan-European investment manager specializing in the European logistics sector. Roebuck is assisting P3’s entry into the UK using their extensive track record and occupier-led experience and will manage both assets in the initial stage of P3’s expansion into the UK.

Otis Spencer, CIO of P3 Logistic Parks, stated: “P3’s entry into the UK market reflects our long-term vision and strategic growth plans. We have carefully selected these logistics assets as they align with our commitment to delivering excellent service quality, operational efficiency, and sustainability to our customers.”

David Proctor, Managing Director of Group Investment at SEGRO, commented: “This disposal has enabled us to divest a number of relatively small holdings, all of which were ear-marked for disposal in the near to medium-term, allowing us to recycle capital into our successful development programme. It also demonstrates the continuing investment appeal of high-quality logistics assets after the significant valuation correction that occurred over the last year.”

The terms of the transaction have not been disclosed. P3 was advised by Colliers on the transaction. DTRE and ACRE acted on behalf of SEGRO.

Ed Plumley, Director, EMEA Capital Markets, Colliers said: “These acquisitions are the good news the market needs. It is a clear demonstration that investor appetite remains for assets in core locations with long-term growth and ESG performance opportunities. Colliers were delighted to bring this off-market opportunity to P3 and provide focused advice as they expanded into a new jurisdiction.”

Research confirms UK’s logistics sector is buoyant

Posted on by Keith McKinley

Against a challenging financial and economic backdrop and heightened business uncertainty, there continues to be robust activity in the industrial and logistics sector, according to latest research from Colliers. The firm has reported that take-up for units over 100,000 sq ft reached 9.6 million sq ft in Q3 2022.

Len Rosso, head of Industrial & Logistics at Colliers, explains: “This take-up figure is 12.6% down quarter-on-quarter, taking the total to end-Q3 to 31.5 million sq ft, a 22% drop when compared to the first three quarters of 2021. However, if we look at the immediate 48-month activity prior to Covid-19, Q3 take-up remains elevated and resulted in an increase of 13% over the average quarterly take-up for the period 2018/2019.”

In addition, the data reveals that occupiers are continuing to target Grade A space in Q3 with take-up for speculative units accounting for 50% of total take-up, while purpose-built space recorded a 26% share. Second-hand space accounted for 24% of take-up.

The research also states that the flight to quality is somewhat driven by occupiers placing greater importance on a building’s ESG credentials. However, it is also dictated by a low level of supply where occupier requirements are likely to be satisfied by the provision of speculatively developed space. Some occupiers are also likely to be planning in advance and opting for purpose-built warehouses to fit in line with their long-term business strategies. Yet given the current issues in the UK’s economy, occupiers will find it increasingly difficult to plan.

When analysing the most recent data for online sales from the Office for National Statistics (ONS), online retailing sales volumes saw a monthly contraction of 2.6% in August 2022, following an increase of 4.8% in July 2022. Despite this fall, online sales volumes are 24.4% above their pre-Covid-19 February 2020 levels.

Andrea Ferranti, head of Industrial & Logistics research at Colliers, said: “Due to a natural drop in online retail sales, when compared to the record levels witnessed over 2021 and 2022, Q3 saw an average occupier deal size of 233,000 sq ft, down 35% year-on-year. While this figure is an indication of where the market may be heading over the next 12 to 15 months, it is worth highlighting that more data is needed over the next couple of quarters, into 2023, to ascertain where we are up to. We expect global multi-national businesses to continue to seek large warehouse space to drive efficiencies while future-proofing supply chain operations.”

Colliers’ latest industrial and logistics research also reveals that supply remains extremely low at 17.8 million sq ft and the scheduled delivery of 18 million sq ft of speculatively developed space this year has not been enough to relieve pressure in the market. Furthermore, 50% of this has either let or is under offer.

Ferranti adds: “We are currently monitoring circa 8.3 million sq ft of new speculative space under construction with scheduled delivery for 2023. As a result, rents are increasing across the board with the latest monthly MSCI figures recording an average annual rental growth to August of 14.2% for distribution warehouses and 12.8% for standard industrial assets. We expect a continuation of rental growth over the next 12-months but at a slower pace due to a challenging economic outlook.”

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Nicolas Roy Appointed as Head of Industrial & Logistics at Colliers Germany

Posted on by Keith McKinley

Nicolas Roy, MRICS, is joining Colliers Germany as the new head of Industrial & Logistics. He comes from Europa Capital, where he has spent the past five years managing transactions across all asset classes from the London office.

In recent years, he has focused on value-add deals and logistics investments. Prior to that, he spent six years at KPMG in the Mergers & Acquisitions – Real Estate practice.

Nicolas has an international background. He studied in Paris, London and Berlin and speaks four languages fluently. As a capital market expert with a private equity background, he is very familiar with the requirements of international investors.

Colliers intends to further consolidate and expand its leading market position in the Industrial & Logistics sector. “Colliers is the leading transaction advisor in the field of leasing and sales. It is important to dovetail this strength even better and, complemented by buy-side advisory, to provide our clients with sound advice. This applies to both national and international clients, who are currently taking a closer look at the industrial and logistics market in Germany,” says Nicolas Roy, MRICS on joining Colliers.

“Nicolas Roy will help us to provide our clients with even better interlinked advice. His internationality and experience as an international investor will enable us to expand this area even further. With an even more strategic orientation of processes and services and the strengthening of the internationality of the industrial and logistics business, we will secure further market shares for ourselves,” says Matthias Leube, CEO of Colliers Germany.

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