Logistics: “Explosion” of investments – Growth by at least 250,000 sq.m. by 2024

The logistics market is recording explosive growth, which has become dominant in the real estate sector, offering returns of up to 7.5% for good quality real estate.

Market participants estimate that the stock of warehouses in Attica in the next 16 months will grow by 180,000 sq.m. and at the end of 2024 will be added approximately 250,000 sq.m. in Attica.

“The high return in relation to other sectors of real estate, as well as other investment products (shares, bonds, deposits, etc.) is expected to lead institutional and non-institutional investors to the increasing placement in warehouse / logistics buildings in the immediate future refers to a recent research by Geoaxis, a company of certified appraisers.

In fact, according to Geoaxis, those companies that were placed at the beginning of the current uptrend secured even lower purchase prices, with almost double-digit annual returns. “Yields in Greece are among the most competitive at European level, as a typical yield in Great Britain or Germany for privileged properties is a little higher than 3%.

Already, according to Geoaxis data, only during the two years 2020-2021 and despite the economic recession due to the health crisis, sales of a total value of 180 million euros have taken place in the Greek logistics market, while lease agreements have been signed for premises with a total area of ​​160,000 sq.m.

“An important problem of the market is that there is no product for rent as the newly built warehouses were either built by their own users, or the lease contracts were concluded before the construction was even completed. We are of the opinion that today, at the beginning of 2022, a newly built warehouse at a key point can record a rent of even more than 5 euros / sq.m / month “, points out Mr. Giannis Xylas, head of Geoaxis.

Who’s investing

Many projects for new warehouses and logistics facilities are progressing or are expected to begin their implementation within 2022.

In this context, real estate companies, such as Briq Properties, Prodea Investments, Trastor and finally Noval of the VIOHALCO group are moving very dynamically. Premia Properties has also made significant logistics investments in the last 12 months.

At the same time, Sarmed, one of the leading logistics companies in Greece, continues its dynamic expansion. The company has set an ambitious investment plan of 20 million euros with a goal of 200,000 sq.m. warehouses on the horizon of 18 months.

Rail Cargo Logistics Goldair has planned a total investment plan of 20 million euros by 2023, which concerns both the expansion of the facilities and other costs of purchasing equipment, etc.

One of the largest owners of warehouses in Greece, the Orpheus Beinoglou group, already has over 100,000 sq.m. warehouses in Greece, many of which are in Elefsina, Inofyta and Sindos, and is intending to double them.

HIG Capital acquired Makios Logistics and is discussing with the banks about the property of Hellenic Steel in Aspropyrgos, while the investment fund Dromeus Capital is also launching large-scale logistics real estate purchases.

Recently, the Belgian group VGP announced its entry into the Greek market, with the creation of an office in Athens. VGP is one of the largest real estate investors in logistics in Europe, with a portfolio of 11 million sq.m. and worth 4.48 billion euros. The goal is to develop new infrastructure in the Greek market as well.

How rental and sale prices are moving

Based on the market research conducted by Geoaxis in November-December 2021, and after its own adjustment with a reduction of 10% due to trading, the highest average requested rental price is recorded in Aspropyrgos with 4.05 € / sq.m / month , the Mediterranean of Attica follows with 3.79 € / sq.m / month, followed by Elefsina with 3.09 € / sq.m / month. The lowest mediated requested rental prices are shown by the Industrial Area of ​​Sindos with 2.70 € / sq.m / month, Inofyta with 2.49 € / sq.m / month and finally Kalochori with 2.34 € / t. m./month.

Leases over 4.0 euros / sq.m / month relate exclusively to properties of very good specifications. Rental values ​​will increase in the coming years as a result of the combination of low supply of quality construction and lack of available land.

Regarding the areas, the largest intermediate available area is recorded in Inofyta with 6,000 sq.m., second in line is Aspropyrgos with 5,500 sq.m. and third comes the Industrial Area of ​​Sindos with 3,600 sq.m.

The smallest available intermediate areas are the Mesogeia of Attica with an area of ​​3,565 sq.m., Elefsina with 3,445 sq.m., and Kalochori with an area of ​​3,030 sq.m.

It is obvious that the very small average area of ​​real estate on the market today refers to older constructions that can not serve the modern needs of the supply chain.

Regarding the selling prices, the highest median asking selling price is recorded in Aspropyrgos with 637.50 € / sq.m., Followed by the Mesogeia of Attica with 590.51 € / sq.m. and followed by the Industrial Area of ​​Sindos with 437.74 € / sq.m. Elefsina shows the lowest average selling prices with 381.78 € / sq.m., Inofyta with 378.21 € / sq.m. and last comes Kalochori with a price of 321.17 € / sq.m.

An indicative average cost of construction of a modern logistics warehouse can range between: 550 € / sq.m. – 700 € / sq.m. (warehouses type Z3) which concerns turnkey construction for the whole unit. It is noted that this cost includes only the work related to the construction of the building and no equipment costs.