Portfolio deals highlight logistics

As illustrated in figure seven logistics deals were among some of the largest deals globally in the first quarter of the year. The industrial sector overall had one of its busiest quarters on record securing 15% of all transactional activity. Despite overall volumes dropping industrial deals stayed stable at $12 billion which is in line with the average quarterly performance of 2011 (Figure 8).

Since the turn of the year investor interest in the higher yielding industrial sector has been ignited following the compression of prime yields in the office and retail sectors globally over the last two years. This trend is likely to continue into Q2 with at least two large industrial portfolios on the market.

Retail and hotel have quiet start to the year

The retail and hotel sectors had their quietest quarter since the start of 2010 in absolute terms, recording $15 billion and $5.5 billion respectively (Figure 8). The first quarter is likely to be the low point for both sectors with a number of transactions globally having just closed or in the final stages of due diligence, which will impact positively on Q2 volumes. These include the sale of eight Westfield shopping malls in the US and the Novotel Hotel in Hong Kong.

The office sector was only slightly below its 2011 quarterly average and overall volumes stayed above the $40 billion level. This means that on an overall market share basis the office sector secured 54% of all investment which goes against the longer term annual trend of the office sector’s market share diminishing over the last four years (Figure 9).