Interview with Theo Soeters

Mid-market European logistics and light industrial property offers attractive income and rental-growth potential because supply is constrained and tenants tend to remain attached to their locations.

• Edmond de Rothschild REIM has exposure to 97 industrial and logistics assets across five countries, focusing on properties of up to 40,000 square metres.
• The European logistics real estate market is valued at €500 billion, while the interview estimates a structural supply gap exceeding €150 billion, driven by e-commerce, supply-chain restructuring and urban growth.
• Recent acquisitions in Großmehring, Duiven and Saint-Denis/Pierrefitte were intended to strengthen income and capital-growth potential, while the Eindhoven disposal recycled capital into assets with higher expected returns at equal or lower risk.
• A Cologne logistics asset acquired in 2021 was 40% below market rent in a submarket with vacancy close to zero; lease renewal negotiations supported an expected gross IRR above 10%, including leverage.
• Portfolio rent collection is above 99% and occupancy is around 95%, with tenant monitoring covering shipping volumes, headcount and car-park usage to identify financial stress early.
• Manufacturing and retail tenants are generating additional demand through reshoring and nearshoring, with particularly interesting opportunities observed in the Netherlands.

Takeaway: Investors should focus on smaller logistics assets where supply constraints, short leases and active tenant management can support rental reversion, while accounting for economic sensitivity, interest-rate exposure and fund illiquidity.