DEMAND OUTSTRIPS SUPPLY IN LOGISTICS

Rising e-commerce and a growing middle class population in emerging countries are driving demand for logistics space at an unprecedented rate.

3d rendering automatic forklift with warehouse robot and drone in factory

The reliance and need for logistics space is at an all-time high, driven by advancements in the e-commerce sector, says JLL. “Logistics continues to be a go to theme, given pre-existing structural shortages and vast new demand driven by e-commerce retailing. This is perhaps the only sector where investor opinions were uniformly bullish, and unsurprisingly the sector once again tops our sector survey rankings,” Urban Land Institute (ULI) states.

In 2017, retail e-commerce sales worldwide amounted to USD2.3 trillion and this is projected to double to USD4.88 trillion within 4 years.

Developer willingness to build new facilities without pre-commitments from tenants is testament to the strength of the market. In 2018, investments poured into this sector especially in major cities in China, as well as Australia and Seoul.

Since September 2018, China has recorded a 52% year-on- year jump in e-commerce-driven real estate development. This was followed by South Korea and Taiwan with respective increases of 17% and 12%; while Japan, India, Hong Kong and Singapore have each recorded 7% growth, says Knight Frank.

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