Logistics remains a hot sector.
It has been predicted that new logistics supply in 2015 will be 65.1 million sq. ft., which is 51% higher than the yearly average between 2010 and 2014.
According to a research note from CBRE, further, logistics will remain a hot sector for investors and will continue to attract capital.
This will further exert downward pressure on yields, albeit at a slower pace compared to previous years, CBRE said.
Here's more from CBRE:
E-commerce is rapidly growing segment of consumption in APAC with business-to-consumer e-commerce revenues expected to double in the region from US$525 million in 2014 to US$1.05 billion in 2017.
This growth in e-commerce revenue is having a transformative effect on a number of markets including China, Japan and India as e-commerce firms and retailers focus on shortening delivery times, in turn fuelling the construction of modern logistics facilities.
Darren Benson, Executive Director, Head of Industrial & Logistics Brokerage, CBRE Asia: “With strong long-term fundamentals, logistics in APAC will remain a hot sector for investors in 2015 and continue to attract capital, supported by three key drivers: strong industrial production growth on the back of the US economic recovery, growing consumer markets, and the continued development of the e-commerce sector.
These themes are inter-related as a robust manufacturing economy leads to rising income levels and rapidly growing consumer markets. This story has already unfolded in China and we expect to see it repeat itself in Southeast Asia and India. Developed markets such as Hong Kong, Japan, South Korea and Australia already have large consumption and are driving demand for logistics space throughout APAC.
Hong Kong, being one of the most landlord-favoured markets, will remain under tight space supply, and occupiers are advised to speed up their leasing decisions to secure logistics space for vital operations.”
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