Light Industrial Real Estate between a Capital Market Asset Class and a Corporate’s Strategic Ressource. Evidence from the German Corporate Real Estate Market

Julian Seger and Andreas Pfnür

ERES from European Real Estate Society (ERES)

Abstract: Continuously falling yields on well-established real estate asset classes (e.g. office, retail) increase the focus on alternative asset classes such as industrial properties in germany. In contrast, the majority of light industrial property is owned by the occupying corporates and therefore not available for the capital market. Simultaneously, the big market segments in United States and Asia demonstrate that renting for corporates is an alternative procurement. Given that the capital market doesn’t appreciate real estate investments of non-property companies two main questions arise. The first question is targeting the reasons for such high ownership ratios and the second one is focusing on the future market trends. This article demonstrates if there is a possibility of establishing new asset class light industrial real estates as well as it tries to identify possible motivating forces in the perspective of german corporates.After a literature based elaboration of the term light industrial real estate the development status and relevance is outlined in an international as well as german context. Furthermore, findings of an already published study of Just and Pfnuer (2016) were analysed in a more comprehensive multivariate data analysis. Applying cluster and discriminant analysis the article aims at identifying clusters of german corporates having an above aversion to real estate ownership.The applied multivariate analysis uncovers groupings of german corporates who have a notable smaller tendency to real estate ownership than other corporates. The analysis finds dependencies due to signifiant differences of the clusters in terms of sector, space and firm size. Furthermore the clusters seem to be exposed to specific driving forces of the structural change.One of the main requirements of establishing light industrial real estate as a new asset class in germany is the reduction of the generally high real estate ownership ratios. This article presents first hints for which corporates renting light industrial real estate is an imaginable alternative to the ownership and uncovers thereby potential adressees for institutional investors.

Keywords: Cluster Analysis; Corporate real estate; light industrial real estate; ownership ratio; rental-model (search for similar items in EconPapers)
JEL-codes: R3 (search for similar items in EconPapers)
Date: 2017-07-01
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