January 12, 2017
Two SoCal industrial markets and one Bay Area market are included on CBRE Group, Inc.’s latest global ranking of investment yields for prime logistics properties. The top 10 list included the Inland Empire, Los Angeles/Orange County and Oakland, according to CBRE’s inaugural Global Industrial & Logistics Prime Yields Report.
CBRE’s Jack Fraker says, “Prime logistics yields across the world have greatly compressed in recent years, as investors worldwide have sought to buy into the burgeoning U.S. industrial-property market.”
Among the 10 individual markets with the lowest prime yields in the world are seven North American markets: New Jersey, the Inland Empire, LA/OC and Oakland at 4.25%; followed by Seattle (4.5%); Vancouver, B.C. (4.75%); and Chicago (5%).
Key findings of the report include:
- Rapid rise of e-commerce pushed global investment yields on prime logistics properties close to record lows.
- Strong market fundamentals continue to attract investors.
- Prime logistics provided a higher initial return on investment, nearly 6% – office (4.5%) and retail (4%).
- The Americas had the lowest average prime yield, at 5.84%, as of Q3 2016.
- Global prime logistics yields continued to decline in the second half of 2016.
- EMEA had largest Y-o-Y decline in prime logistics yields.
- China’s growth is being driven by e-commerce and transformation in the physical supply chain.
- Growth in investment activity is expected to continue, but investors may proceed with caution in 2017.
For comments, questions or concerns, please contact Dennis Kaiser