Logistics warehouses are tending to adopt XXL formats due to the evolution of consumption patterns. With more advanced technology, small warehouses are becoming more important for last-mile logistics. In a market where yields are increasingly attractive, the valuation of these assets is of crucial importance.
Located between warehouses and offices, the business premises are mainly dedicated to production and handling activities, occupying up to 80% of their surface area. Their size, which varies considerably, can be used by both local SMEs and international companies.
Long considered unclassifiable, car parks are nevertheless real real estate assets with high yields that investors do not think about. Rental security associated with a low rate of charges remains the main investment criterion. Its location, its configuration and its users are crucial elements for its valuation.
Logistics warehouses...!
Logistics activities are undergoing significant transformations due to changes in consumption patterns: warehouses tend to adopt XXL formats, more advanced technology is implemented and small warehouses are gaining importance for last-mile logistics.
Thus, the valuation of a logistics asset is based on several factors, including its location, configuration and users. In a market where returns are increasingly attractive, the valuation of logistics warehouses is of crucial importance, in the face of increasing competition.
What are the attributes that characterize the asset “Logistics Warehouse” ?
Warehouses and logistics platforms (EPL) are unevenly distributed across the metropolitan area. They are mainly located along the main roads and junctions and around large urban areas, and are increasingly concentrated on a limited number of sites.
By definition, a logistics warehouse is a building for storing and distributing material goods for logistics purposes: « semi-finished or finished » products enter, are stored and exit, packaged differently or not, to be distributed in a given area. The logistics warehouse therefore intervenes between production and consumption.
Logistics warehouses, ranging from vast areas of thousands of square meters to impressive proportions for XXL warehouses, are distinguished by several notable characteristics. Their considerable size, varying from 80,000 to 140,000 m² for XXL warehouses, is accompanied by a significant height, often exceeding 10 meters and reaching up to 20 meters.
These facilities also have a high rack storage capacity, large manoeuvring areas in front of the platforms, generally 30 to 35 metres, as well as high-performance insulation. In addition, their floor is designed to support heavy loads, with a resistance that can exceed 5 tonnes per square meter, and they are equipped with effective fire safety systems, particularly sprinklers.
What are investors' expectations ?
Following, in particular, the explosion of e-commerce, logistics warehouses have grown significantly in recent years to become one of the most sought-after assets on the French commercial real estate market. Consequently, faced with the increase in demand for French logistics real estate, investors are becoming increasingly selective in their choice of sites.
The main criterion remains rental security. Given the size of the sites and buildings and the increase in current rents (very large rental budgets), investors are favoring assets rented under long-term firm leases by a solid tenant. The second criterion is the age of the buildings.
Indeed, to limit the risk associated with obsolescence, the most recent warehouses are favored. Finally, the last criterion is location. To reduce the risk of vacancy, investors are focusing on the most sustainable installations: platforms located near large cities and served by a good road network.
What are the main evaluation criteria for logistics warehouses ?
Location and accessibility to infrastructure represent one of the most determining factors when assessing the value of logistics assets. The category of the warehouse, indicated by classifications such as AAA, AA, A, B or C, represents the level of functionality, quality and security of the facility.
• Infrastructure & equipment: Accelerated depreciation of certain (refrigerated) warehouses.
• Geographic location: Proximity to major transport routes.
• Taxation: Property taxes and other taxes.
• Lease term: 9 or 12 years in France, which offers more security. Logistics is now a major pillar for companies, which are constantly looking to modernize their infrastructure to ensure fast and cost-effective deliveries.
This evolution is reflected in a growing demand for large-scale warehouses, increased automation and pooling solutions between different logistics players.
Warehouse rents vary based on a variety of factors, such as size, age and property tax liabilities, and play a crucial role in assessing the value of these assets.
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