Mingtiandi

Asia real estate and outbound investment news

  • Facebook
  • LinkedIn
  • RSS
  • Twitter
Sign Up / Login Logout

Lost your password?
Register
Forgotten Password
Cancel

Register For This Site

A password will be e-mailed to you.

  • Capital Markets
  • Events
    • Mingtiandi 2022 Event Calendar
    • APAC Residential Forum 2022
    • Asia Logistics Forum 2022
    • Asia REIT Forum 2022
    • APAC Data Centre Forum 2022
    • Singapore Focus Forum 2022
    • Office Strategies Forum 2022
    • More Events
  • MTD TV
  • People
  • Logistics
  • Data Centres
  • Asia Outbound
  • Retail
  • Research & Policy
  • Advertise

Investors Boost APAC Logistics Deals Amid E-Commerce Boom

2020/07/14 by Jonathan Burgos Leave a Comment

https://player.vimeo.com/video/438107315?h=3a769e064c

 
Institutional investors are rapidly increasing their investments into logistics properties as the e-commerce boom bolsters demand for warehouse space across the region, industry experts said Tuesday in the second installment of Mingtiandi’s MTD TV online video series on Asia Pacific logistics opportunities.

Traditionally, investors have kept logistics to about 10 percent of their real estate investment portfolios, with office properties taking the lion share followed by bricks and mortar retail assets. But now, logistics properties make up 30 percent of the assets in LaSalle Investment Management’s portfolio in Asia Pacific, with other investors rushing to follow suit.

The panel on opportunities in core logistics markets in Asia Pacific brought together top executives from Allianz Real Estate, logistics developer and fund manager ESR, JLL and LaSalle Investment Management in a discussion that revealed ways that the coronavirus pandemic has amplified already growing demand for warehouse space and investment opportunities in the sector.

Money Piles into Warehouses

“The logistics market has been incredibly resilient,” said Claire Tang, senior managing direct and head of Greater China at LaSalle Investment Management. “If you look at the overall tenant demand for logistics, whether its e-commerce, pharmaceuticals or healthcare companies, are doing really well.”

Claire Tang Lasalle

Claire Tang, Senior MD – Head of Greater China, LaSalle Investment Management

LaSalle has developed a logistics portfolio across China, Japan and Korea, helping to deploy investor capital by building its own properties and leasing them to tenants. “We have a very high allocation in this strategy,” Tang said. “We built a strong team around this strategy and we don’t expect that to change anytime soon.”

While most investors have no fixed sector allocation in their portfolios, sovereign wealth funds, pension managers and other institutions are paying closer attention to the sector and are likely to increase their allocations to the asset class close to the 30 percent level that LaSalle Investment has achieved, said Stuart Crow, CEO for Asia Pacific capital markets at JLL.

“As transaction volumes grow and as liquidity grows in the logistics sector, we will see a lot of the funds, particularly the diversified funds, increasing their allocation,” said Crow. “There’s a large number of global investors telling us they have been under allocated to logistics in the region. We’ll definitely see more money piling into the logistics sector.”

New Generation of E-commerce Consumers

In 2019, logistics deals worldwide already increased 30 percent year-on-year, according to Crow. Despite the economic fallout from the Covid-19 pandemic, there’s some $20 billion of capital waiting to be deployed into warehouse properties worldwide, he added.

Stuart Crow JLL

Stuart Crow, CEO Capital Markets, APAC, JLL

“The importance of e-commerce and logistics have really become more apparent but it’s been an ongoing trend for sometime now,’ said Stuart Gibson, co-founder and co-CEO of ESR. “We have a whole generation of customers who have been exposed to e-commerce. That’s just going to grow.”

The Hong Kong-listed warehouse developer is among the most active investors in logistics assets across the Asia Pacific, having put together $2.2 billion of investment partnerships targeting the sector so far this year. The deals include a partnership with Singaporean sovereign wealth fund GIC in Australia and a tie-up with the Canada Pension Plan Investment Board and Dutch pension manager APG Asset Management in South Korea.

In June, ESR added to its mainland China assets by purchasing a portfolio of three logistics facilities totalling 345,000 square metres (3.7 million square feet) in the eastern Chinese province of Jiangsu. Then during this month ESR announced a joint venture with Canadian insurer Manulife to take over another four properties in Guangdong and Jiangsu that it had developed under a fund invested by Dutch pension fund manager PGGM.

Stuart Gibson_esr

Stuart Gibson, Executive Director, Co-founder & Co-CEO, ESR

Logistics Oversupply Unlikely

Allianz Real Estate, which has invested €1.8 billion euros ($2.05 billion) in logistics properties in the Asia Pacific, is optimistic demand for such assets is sustainable.

“Given the rising middle class in Asia, we are confident that logistics will continue to do well in the long run,” said Chang Wei Ng, head of asset management for the Asia Pacific at Allianz Real Estate. “I don’t think there will be an over saturation of the market.”

Ng Chiang Wei Allianz

Chiang Wei Ng, Head of Asset Management APAC, Allianz Real Estate

Agreeing, Tang said an oversupply situation in China for instance is unlikely considering the rapid growth of e-commerce in the country. While the Chinese e-commerce market is the biggest in the world and almost twice the size of that of the US, the overall supply of grade A logistics properties in China is only equivalent to one-sixth that of the US, she added. “In that context, there’s still a lot of runway to grow.”

Logistics properties in China are also very resilient and will benefit from government stimulus measures in the near term, Tang said. The Chinese government is handing out online shopping vouchers to consumers and this will boost online spending and increase the take up rate of logistics space by e-commerce companies, she added.

The rapid growth in online consumption will have a huge impact on logistics developers as e-commerce companies typically require three times more warehouse space than traditional retailers, Jeffrey Perlman, managing director and head of Southeast Asia at Warburg Pincus told Mingtiandi recently.

Besides online fashion retailers, demand for warehouses is being fueled by grocers, pharmaceutical companies and food delivery firms as consumers holed up at home because of social distancing measures turn to online shopping.

Share this now

  • LinkedIn
  • Share
  • Tweet
  • Email

Filed Under: Past Events Tagged With: Allianz, daily-sp, ESR, Featured, highlight, JLL, LaSalle Investment Management, Logistics, MTD TV, MTD TV Video

Leave a Reply

Your email address will not be published. Required fields are marked *

Get Mingtiandi Delivered

MTD TV

Tim Foster
ESR, C&W Point to Robots, Solar Power in Quest for Efficient Shipping: MTD TV
show thumbnail
China Lockdowns Boost Warehouse Market: LaSalle, SC, C&W and Baker Mac on MTD TV

More MTD TV Videos>>

People in the News

serene nah kerry
Kerry Properties CFO Resigns After Less Than 8 Months on Developer’s Board
Lu Yi Shimao
Asia Real Estate People in the News 2022-06-27
Wu Jianxin Kaisa
Asia Real Estate People in the News 2022-06-20
Graham Mackie Tishman
Tishman Speyer Appoints Graham Mackie to Lead APAC Push Beyond China and India

More Industry Professionals>>

People in the News

Kerry Properties CFO Resigns After Less Than 8 Months on Developer’s Board

serene nah kerry

Hong Kong-listed developer Kerry Properties waited until the city was transfixed with the arrival of a visitor from the … Read More>>

Asia Real Estate People in the News 2022-06-27

Lu Yi Shimao

A senior appointment by one of China’s crew of defaulting privately-controlled developers leads this week’s roundup of … Read More>>

Asia Real Estate People in the News 2022-06-20

Wu Jianxin Kaisa

Top level executive changes at a pair of major mainland real estate companies lead this week’s round-up of personnel … Read More>>

Tishman Speyer Appoints Graham Mackie to Lead APAC Push Beyond China and India

Graham Mackie Tishman

US developer Tishman Speyer has hired industry veteran Graham Mackie as a managing director to lead the firm’s Asia … Read More>>

More Industry Professionals>>

Latest Stories

serene nah kerry
Kerry Properties CFO Resigns After Less Than 8 Months on Developer’s Board
Kevin Kang H3
CDL, HThree Buying Downtown Melbourne Office Tower From AMP for $162M 
desmond tang Straits Real Estate
Straits Trading to Buy UK Business Park Assets From Brookfield for $157M

Sponsored Features

Should Proptech Give Us Sleepless Nights?
Hong Kong’s Evolving Commercial Real Estate Landscape
Opportunities in the Greater Bay Area

More Sponsored Features>>

MTD-QR-Code-320

Connect with Mingtiandi

  • Facebook
  • LinkedIn
  • RSS
  • Twitter

Real Estate News

  • Capital Markets
  • 2022 Event Calendar
  • MTD TV Archives
  • People
  • Logistics
  • Data Centres
  • Asia Outbound
  • Retail

More Mingtiandi

  • About Mingtiandi
  • Contact Mingtiandi
  • Mingtiandi Membership
  • Newsletter Subscription
  • Advertise
  • Terms of Use
  • Privacy
  • Join the Mingtiandi Team


© 2007-2022 China Advertising Media Ltd (Samoa). All rights reserved.