‘Logistics continues to be a high conviction sector for investors. There remains a compelling narrative supporting this view; underpinned by shifting trends in the way we choose to consume goods, and where they are produced. But the sector has exhibited bubble-like behaviour in recent years; investors have scrambled to gain a foothold in the market, encouraged by exceptionally strong occupational demand and the resultant rental growth since the pandemic. Higher interest rates have underpinned a large repricing in prime assets, but the bubble need not burst; demand and supply dynamics will support stable or growing rents across most markets, with extremely low vacancy rates insulating the downside.’
2022 was another very strong year for the logistics sector. Investment volumes totalled US$ 269bn globally, which despite falling by 21% in comparison with 2021, still represented a 30% increase on pre-pandemic levels. This contrasts the trend across offices, where transaction volumes were down on 2019 levels across all regions. As such, slowing momentum over the course of the year was more a reflection of a normalisation across capital markets, as opposed to a fundamental retrenchment.