Outlook for Asia-Pacific logistics assets looks bright next year as investors chase yield amid low interest rates
- Logistics real estate seen doing better than offices in most Asia-Pacific markets, according to JLL
- In China, demand for logistics facilities remains strong in the Greater Bay Area city of Dongguan, according to Colliers International
Property investment in Asia-Pacific is set to rebound by 15 to 20 per cent in 2021, with logistics emerging as the key growth driver amid continuing demand from grocery retailers, health services firms and e-commerce providers, according to JLL.
In a low-return and low-interest rate environment, logistics is likely to triumph offices in most Asia-Pacific markets as investors hone in on yields next year, the property consultancy said. Investments in build-to-rent multifamily residential properties, such as student housing, co-living and senior care, will also gain pace in 2021, it added.
Stuart Crow, chief executive for Asia-Pacific capital markets at JLL, said that transactions had rebounded in the latter part of this year and will accelerate in 2021 as investors reaffirm their commitment to increasing exposures to Asia-Pacific real estate.
“Longer term, the investment outlook remains incredibly positive given the expectation for continued low interest rates, huge amounts of dry powder and the insatiable hunt for yield,” Crow said.
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Intelligent sorting systems help China's JD.com cope with demand during Covid-19 pandemic
In Asia-Pacific, the logistics sector has remained resilient despite the global pandemic. In the first half of 2020 while overall property transaction volumes fell 32 per cent year on year, logistics facilities only saw a 6 per cent drop in volumes, JLL data published in September showed.
The coronavirus pandemic has accelerated many megatrends that have bolstered the industrial property market, such as data centres and facilities related to self-storage and medical goods, according to real-estate investment fund manager Nuveen Real Estate.