With GARBE Industrial Real Estate GmbH and other subsidiaries, GARBE is a fully integrated, market-leading real estate management platform for logistics, corporate and technology real estate in Germany and Europe. In these segments, we currently manage over 204 properties with a total lettable area of 5.8m sqm and real estate assets of over €10.2bn.
Our active and integrated 360-degree management approach over all investment profiles in these segments is operated with currently more than 250 employees at 16 European corporate locations in the areas of project development, fund/portfolio management, investment and property management including asset and property management.
We have been providing these management services in the field of logistics and corporate real estate for over 30 years for a variety of different, predominantly regulated investment vehicles and mandates such as separate accounts, commingled funds and joint ventures for mainly institutional (professional) investors with German and European investments.
Since then, GARBE has developed into a modernly organised and international company for institutional investors that is active in all relevant logistics real estate and adjacent areas such as the development of data centres or photovoltaic plants.
As a proven and market-leading specialist in logistics, industrial and corporate real estate, GARBE will continue to focus on these segments throughout Europe and further expand its growth strategy and activities with a boots-on-the-ground approach. Within this frame- work, we are continuously developing attractive real estate projects, rental space offers for tenants and actively managed investment strategies as well as ESG fund solutions for our investors.
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INDUSTRIAL: Germany – Logistics real estate has been one of the most popular real estate asset classes in Germany for years. The last years have challenged global supply chains with renewed crises. Despite the economic downturn, high inflation and rising construction, energy and financing costs as a result of the war in Ukraine, the demand for logistics space in 2022 has reached more than 8m sqm – a stable continuation of the record-breaking year before. This is far more than the market can realise by providing new space for project developments. Around 6m sqm each are expected to be built in 2022 and 2023. But even this peak performance is not enough to compensate for demand. Especially since many project developments have been cancelled recently due to the increased construction and financing costs. It can be assumed that the actual completions will be below the two forecast values.
Vacancies are almost non-existent and there is a structural demand overhang. This is because fewer and fewer plots are available. For this reason, former minor markets are becoming increasingly sought after. The current market situation is also having an impact on the development of rents, which have been rising significantly for years. This affects the existing stock as many lease contracts hold indexation clauses and structural demand is high. In the case of new builds, there are also the higher construction and financing costs, which cause higher prime rents. This trend is set to continue in the future.
On the real estate investment market, logistics properties are now characterised by a higher popularity than other asset classes with constantly new records in transaction volume – even if the absolute volume is lower in comparison to other assets. However, the effects of the current crisis have halted the ongoing yield compression and have even led to decompression on the German logistics market. There is a possibility that the decompression will continue to increase in the future. The yield gap to other asset classes is narrowing. Compared to the risk-free interest rate of a federal bond, however, logistics real estate can still achieve a good return.
The demand for logistics real estate is secured in the long term. An important driver in this context is e-commerce, which was weakened due to an overly ambitious expansion, but will pick up the pace once the consumer climate regains confidence. Re- and nearshoring will most likely also play a minor role, as is becoming more present in supply chain discussions. Lastly, the increased outsourcing of parts of the industrial value chain to logistics service providers is a crucial trend. This will continue in the future and secure the cash flows from leasing.
Europe – The market situation in other European countries is largely analogous and characterised by a yield decompression in the prime and minor markets, shortage of space, rent increases and growing financing costs. However, the initial situation and dynamics are different, so that a pan European investment strategy based on further rent increases and favourable entry factors leads to profitable opportunities.
Parts of the formerly outsourced production will be brought back to Europe. At the same time, strategic warehouse reserves are being created again to secure the supply chains. The former fringe markets of Southern and Eastern Europe offer themselves as locations here due to the better availability of space and lower energy and wage costs. But the established core markets will also remain in demand due to their proximity to sales markets.
Investment principles & strategy
- Leading platform in Germany and Europe: GARBE, as the leading investment and asset manager in the logistics, industrial and corporate real estate sector in Germany and Europe, has with its 250 employees at 16 European locations, over 204 managed properties with 5.8m sqm of lettable space and a large number of project developments in an AUM volume totalling more than €10.2bn, a first-class track record.
- Fully integrated 360-degree management approach: with market-lead- ing expertise across all value-added areas in the fields of project development, investment management, asset management, including property management and fund and portfolio management, with broad and deep market net- working and perception in the markets and longstanding relationships with, among others, regional and international tenants, brokerage houses, asset and portfolio owners, banks/financiers and authorities
- Excellent access to investment opportunities and reliable execution: through a local ‘boots-on-the-ground’ approach with a deep market network- ing of the experienced employees and teams to longstanding local and supra- regional as well as international partners (tenants, brokers, asset owners, banks, etc) as an important pillar of the continuous deal flow, preferably off-market.
- Comprehensive experience in regulated fund, portfolio, investment and asset management for industrial and corporate real estate: GARBE has been managing real estate assets in regulated real estate special AIFs for institutional and professional investors for around 20 years.
- Sustainability and ESG have been an integral part of our DNA for more than 10 years: as part of our organisation, decisions and processes. The impact of our business activities on the environment and society is an important part of our corporate culture and links our actions to our environmental/social responsibility.
- GARBE: as an independent group of companies, has an efficient organisation and can implement decisions and solutions for investors flexibly and with agility without internal group coordination processes and interests.
Strategic corporate development
As a proven specialist and market-leading platform for logistics, industrial and corporate real estate in Germany and Europe, GARBE will continue to focus on these segments throughout Europe and further expand its growth strategy and activities in Europe. Within this framework, we are continuously developing attractive real estate projects and rental space offers for users as well as actively managed investment strategies and fund solutions for our investors, such as the European GARBE Logistics Real Estate Fund Plus III at present. With our local boots-on-the-ground approach across Europe and by leveraging our well-resourced, dedicated responsible investing teams, we aim to increase also the number of ESG, sustainable and impact strategies to meet the increasing demand of our clients. In parallel, we will further expand other related business areas such as the development of data centres and photovoltaic systems.
GARBE Industrial Real Estate GmbH has compiled the contents of this information with care. Despite all due care, the data and content may have changed in the meantime. Therefore, GARBE Industrial Real Estate GmbH does not assume any liability or guarantee for the timeliness, accuracy and completeness of the information provided. Excluded from this is the liability for own gross negligence or intent. Insofar as the information contains forward-looking statements, these are based on current estimates and assumptions made by GARBE Industrial Real Estate GmbH and are subject to a number of risks and uncertain- ties that could cause a forward-looking estimate or statement to be subject to certain uncertainties and to change.
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