A Nordic property manager overseeing USD 75bn of assets is gearing up for another 12 months of growth in the logistics sub-segment thanks to an acute supply-demand imbalance.
Max Barclay, the head of Newsec's advisory business, says international investors are now showing keen interest in the region's biggest economy where development in logistics has fallen behind that of other countries.
"The demand for flexible, modern logistic structures adjacent to the cities has exploded over recent years and Sweden hasn't been able to keep up with that," Barclay said in an interview.
The share of industrial property purchases in the Nordic and Baltic regions by foreign investors has already jumped to 60 percent from 19 percent in 2018, according to Newsec.
That strengthening demand would build on what’s proving a record year for property deals in the industrial and logistics segment. This year, Newsec expects Nordic and Baltic transaction values in the sector to top the previous high of EUR 5.9bn (USD 6.8bn), achieved in 2020.
But Barclay warns returns in this area could narrow as a consequence of "a relative lack of modern supply as well as competition between investors," he said.
In a research report published Wednesday, Newsec said the premium on invested capital to hold logistic assets over offices will shrink next year from the current level of 100 basis points, following similar patterns in other parts of Europe.