APAC Logistics Investment Volume Reached Record $13.5B in 2020

While the COVID-19 pandemic has dented industries globally, the crisis has created new levels of demand for logistics facilities, driving trades of warehouse assets to a record high in 2020, according to recently released statistics.

Preliminary findings from property information provider Real Capital Analytics show that APAC logistics deal volume reached $13.5 billion in 2020, narrowly surpassing 2018 and 2019 levels and nearly doubling the amount traded in 2017.

That record volume came as four of the region’s markets — Japan, China, South Korea and Australia — ranked among the 10 biggest logistics markets globally in terms of logistics deals in 2020, according to Singapore-based RCA analyst Benjamin Chow.

Aussie Deals Jump 56%

Of the key Asia Pacific markets, Australia saw the biggest gain in logistics deal volume last year, notching a 56 percent rise to a record $2 billion. A large chunk of that Aussie total came from global institutions stocking up on warehouses down under, led by Aldi supermarkets’ June sale of an A$648 million ($495 million) portfolio to an Allianz Real Estate-Charter Hall joint venture.

South Korea set a record of its own with $2.5 billion in investment, up 16 percent, with real estate fund manager Nuveen helping to contribute to that total with its $122 million purchase of a last-mile facility near Seoul in October. And late last year ESR’s Kendall Square unit raised $650 million by selling a set of logistics facilities to its newly formed REIT affiliate.

China, meanwhile, enjoyed deal volume of $3 billion, up 27 percent and putting the world’s second-biggest economy in fifth place among global markets. Mainstream global institutions played a significant role in the mainland’s warehouse sector last year, with JP Morgan forming a $600 million logistics joint venture with Warburg Pincus-backed New Ease in May.

Also boosting China’s total was GLP China Income Fund I, a core vehicle managed by GLP which reached a $2.1 billion final close in April of last year.

Investment in Japan slid 11 percent to $5.3 billion, which was enough to rank the country as the third-largest logistics real estate market in the world.

Collectively, the four markets accounted for 96 percent of all logistics deal volume in APAC in 2020, RCA said.

China, South Korea Maintain Momentum

China and South Korea remained two of the fastest-growing markets in the world: from 2015 to 2020, logistics investment grew at an annualised rate of 66 percent and 51 percent, respectively, according to RCA’s analysis.

The research house noted that deal activity in Australia was subdued for most sectors last year, with office, retail, and hotel investment plummeting by over a half. But the logistics sector bucked the trend by growing to become the 10th largest market of this type globally.

Japan, the region’s most mature market, was buoyed by some big deals in 2020, capped by GLP J-REIT’s December purchase of six Greater Tokyo logistics facilities and an Osaka-area warehouse.

RCA plans to release its 2020 Year in Review edition of Asia Pacific Capital Trends on 3 February.