The rise of e-commerce has helped make logistics one of the real estate industry’s hottest sectors and is transforming the way that distribution centres are designed and operated, according to experts appearing today at Mingtiandi’s Asia Proptech Forum.
Asia Pacific’s e-commerce market led the world at nearly $2.5 billion in value in 2020. That scale is driving a transformation of once-simple warehouses into tech-enabled fulfilment centres, senior leaders from regional developer ESR, Taiwan’s Ally Logistic Property (ALP) and UK venture capital firm Pi Labs revealed in their panel discussion on Mingtiandi’s MTD TV video platform.
“Logistics is very much a business where everyone is involved,” said Dr Michael de Jong-Douglas, senior managing director at ESR. “Everyone is getting something delivered, whether it’s from the factory to the warehouse to the store, or often now from the factory directly to the end consumer. So I think logistics is very much becoming the forefront of a lot of the technology adoption.“
Today’s programme was the second and final session in Mingtiandi’s Asia Proptech Forum, which has focused on how the COVID-19 pandemic is accelerating adoption of technology in the real estate sector.
Building a Better Warehouse
The one-hour programme brought together de Jong-Douglas, who also heads Hong Kong-listed ESR’s Future Solutions Group; Gene King, director of international expansion at ALP; and Faisal Butt, CEO of Pi Labs, which is among Europe’s most active proptech investors.
With operators under pressure to achieve ever-faster delivery times, companies that develop and lease warehouses are increasingly turning to tech solutions, including hardware and software to help track and analyse how goods move through facilities.
ALP’s King likened the tech drive at warehouses to an “arms race” for accuracy and efficiency.
“At this moment, in the era of a new economy, it’s all about efficiency and speed,” he said. “The nature of e-commerce, it’s about tech, and also it’s very complex, and there’s a very high requirement on immediacy.”
Pandemic Drives Change
Pi Labs’ Butt drew a comparison between how the global financial crisis gave rise to fintech solutions and how COVID-19 is triggering proptech use.
“The pandemic is acting as a major catalyst for proptech and driving adoption,” he said. “It was already happening, but it was happening more slowly. The speed at which the real estate industry across the asset classes — offices, residential, retail, logistics — the speed at which the interest is growing has been very significant.”
The panel session on logistics real estate followed the launch last week of “Tech Adoption in Asian Real Estate: The Pandemic Drives Innovation”, an in-depth study by Mingtiandi, which explored how the COVID-19 crisis has forced change in one of Asia’s most traditional industries. Both the report and the event series were sponsored by property software provider Yardi.
While e-commerce has long been a driving force for warehouse development in Asia, the coronavirus crisis pushed consumer demand to new heights and posed operational challenges at the same time, with both forces creating new incentives for tech-driven innovation in the sector.
To find out more about the transformation of Asia’s logistics real estate sector, click here to download Mingtiandi’s proptech report.
Value-Add Strategies Up Next
With the proptech forum now concluded, Mingtiandi is preparing to host a three-part series of events in March and April on value-add investment strategies for Asia’s real estate sector.
Then in May, we will follow up with a three-part forum on multi-family real estate projects in the region. You can find out more about our full-year event calendar here.