Money has been pouring into the logistics sector from a variety of different sources, including US banks, institutions, private equity, and firms in the Middle East and Far East.
“That has driven down yield considerably over the last six months,” according to Legal & General Investment Management senior fund manager Jonathan Holland, speaking to Funds Europe for the April issue.
A lot of the new capital can come with a lack of knowledge, according to Thomas Karmann, head of logistics at Axa Investment Managers’ alternatives division, Axa IM Alts.
“Risk is often not correctly priced anymore and there is hardly any differentiation of location and market depth for (re)letting. There seem to be less single asset sales and more portfolios, containing some less attractive buildings which would almost be unsellable on a standalone basis,” he said.
Learn more about challenges in logistics investment here: Global real estate: Logistics centres reach a new milestone
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