According to the latest European Logistics Outlook by Savills, industrial investment volumes in Europe totaled €5.1 billion in the first quarter, experiencing a 49% quarter-on-quarter decline and a significant 73% drop compared to the record-high volumes of Q1 2022. When comparing year-on-year investment volumes on a country-by-country basis, the Czech Republic (-3%), Ireland (-29%), and Portugal (-45%) demonstrated the smallest declines.

Among the European countries, only Poland and Romania witnessed an increase in investment activity. Poland saw a remarkable 110% year-on-year rise, largely driven by P3 Logistics Parks' acquisition of a 185,000 sqm industrial warehouse from Panattoni. On the other hand, Romania recorded no investment transactions in Q1 2022. The largest declines in investment volumes were observed in Hungary, where no deals were completed during the quarter, as well as in Norway (-92%), Belgium (-88%), and France (-84%).

Fraser Watson, Investment Advisory Director at Savills CZ&SK, highlighted the Czech Republic's resilience in the face of macroeconomic factors impacting the continent. Several factors contribute to this resilience, including the country's strategic geographic location, limited new supply, strict ownership control over existing stock, and consistently low vacancy rates. These factors have sustained investor demand for Czech industrial properties.

In Q1 2023, industrial transactions in the Czech Republic amounted to €125.5 million, accounting for 30% of the total transaction volume for the quarter. Industrial assets were the most actively traded sector, with four deals concluded. Market yields for prime logistics properties remained steady at 5.00% as of Q1 2023.

Three out of the four transactions in the Czech Republic involved domestic capital, with the fourth transaction involving a Slovak entity. This trend aligns with previous years, where domestic and regional investors have been the primary sources of capital. Notable vendors in the European market during the quarter included Goodman, LondonMetric, and Panattoni, while the largest buyers by volume were BentalGreenOak, Blackstone, and AGC Equity.

Marcus de Minckwitz, Head of EMEA Industrial & Logistics at Savills, noted that the decline in investment volumes in Europe can be attributed to tighter monetary policies and increased interest rates, which have raised financing costs and dampened investor sentiment. As the market stabilizes and uncertainty decreases, a resurgence in transaction activity is expected as the year progresses.