Investment group Henderson Global Investors has suggested that as multi-channel retailing continues to grow, rents for industrial warehouses will rise dramatically in the second half of 2013.
Published last week, the report highlights that retailers across Europe will need a minimum of 25 million sqm in additional warehouse space over the next five years, a figure far beyond any previous estimation.
It is possible that this demand could be even higher, as there are numerous emerging markets (particularly in Eastern Europe) where the supply chain network is still establishing itself. Obviously, as these markets grow, so will transaction volumes.
Meanwhile, data from Cushman & Wakefield revealed a major drop in prime yields across the market, led by the retail sector. Retail warehouses in particular saw a steep decline with an average fall of 15bp, which continues a pattern seen in 2011 and 2012.
This leaves retail yields at a 16-month low, with significant investor activity expected in the coming months.