Our active and integrated 360-degree management approach overall investment profiles in these segments is operated with currently more than 300 employees at 16 European corporate locations in 10 countries 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 organized 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. Further information can also be found on our homepage: www.garbe.de/en/
Sector forecasts
INDUSTRY: Germany
Logistics properties have been among the most favored real estate asset classes in Germany for several years. In recent times, global supply chains have faced renewed challenges, such as the Russian aggression against Ukraine and the aftermath of the Hamas attack on Israel. Despite facing high financing costs, demand for logistics spaces in Germany remains robust, albeit slightly lower compared to previous years. The absorption rate reached 6.3 million square meters in 2023, marking a 25% decrease compared to 2022. Of this, 66.5% is attributed to newly constructed properties, accounting for approximately 4.2 million square meters. This indicates a decrease of around 1.3 million square meters in newly built space leased compared to the previous year, representing a 23% decline. Alongside the incresing costs associated with project developments, there persists a shortage of space in key logistics regions and an increased emphasis on extending contracts for existing properties. The automotive sector, contributing to four of the five largest deals, significantly influenced the sustained high absorption of space last year. The current market dynamics also impact rent development, which has been steadily increasing for years, affecting both existing properties and developments.
Logistics properties have now surpassed other asset classes in popularity in the real estate investment market, with transactions in the logistics property sector accounting for the largest share of the commercial property market for the first time last year, at approximately 28%. The ongoing effects of the current interest rate rally have led to a substantial decompression. Yield compression is believed to have reached its limit, and yields are expected to compress once more before the interest rate turnaround. The yield gap with other asset classes is narrowing. However, compared to the risk-free interest rate of German government bonds, logistics property can still yield a higher return.
Europe
The market situation in other European countries mirrors that of Germany to a large extent and is characterized by declining yields across almost all markets, a shortage of space, rent growth and increasing financing costs. However, the initial circumstances and dynamics vary, thus a pan-European investment strategy based on further rent growth and favorable access factors is poised to offer lucrative opportunities. Certain portions of previously outsourced production are being relocated to Europe. The already dominant role of ecommerce is further bolstered by the entry of new players such as Temu and TikTok; moreover, this market remains underdeveloped in many countries but is anticipated to catch up in the future. Southern and Eastern Europe, former peripheral markets, emerge as ideal locations due to better space availability and lower energy and labor costs. Nevertheless, established core markets will continue to be in demand owing to their proximity to sales markets.
Investment principles & strategy
- Leading platform in Germany:
GARBE, as the leading investment and asset manager in the logistics, industrial and corporate real estate sector in Germany and furthermore active in Europe, has with its over 300 employees at 16 European locations, over 222 managed properties with 6.5m sqm of lettable space and a large number of project developments in an AUM volume totalling more than €10bn, a first-class track record.
- Fully integrated 360-degree management approach:
with marketleading 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 networking 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 networking of the experienced employees and teams to longstanding local and supraregional 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 organisation, decisions and processes for more than 10 years. 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 tenants, 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 also increase 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.
Performance verification
GARBE has achieved excellent results for its investors in the past, depending on the investment strategy chosen in each case. We would be happy to provide further information about the performance and how it was achieved by GARBE in a personal conversation.
COMPLIANCE STATEMENT
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 uncertainties that could cause a forward-looking estimate or statement to be subject to certain uncertainties and to change.
