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LONDON-Investment sales in Europe’s industrial and logistics sector was down 45% for the first half of the year compared to the second half of 2008, according to a report from the European office of CB Richard Ellis released in mid October. The sector recorded a total of $3.68 billion of sales. Despite the fall-off, the sector’s share of the overall investment market remained constant at approximately 10%, which CBRE attributes to what it calls a “defensive characteristic” of a high income return and less dependence on rental growth. According to the report, the Netherlands, France and Germany accounted for 25% of investment sales, illustrating the relative resilience of the core Western European markets relative to Southern and Eastern Europe. More significantly, the UK’s share of investment increased to 46%, up from barely a quarter last year. Researchers say the shift reflects the fact the UK is further along in the value-adjustment cycle and less likely to suffer additional reduction. The report says UK industrial yields have risen over 300 basis points since mid-2007; by comparison, industrial yields across the 15 European countries covered by the study have risen around 150 basis points in the same period. However, the former are stabilizing, while the latter are still rising, though at slowing rates. Because of the rising yields, CBRE says a range of pan-European institutional investors and German open-ended funds are increasingly drawn to the sector.Resource Center
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