With investors increasingly seeking exposure to the logistics and industrial (L&I) market, niche sectors have gained mainstream investor attention, including IOS, which is valued globally at approximately US$215 billion.
The need for IOS sites has grown due to consumption growth (container storage and overflow demand) and ongoing demands from the construction and infrastructure sectors, while more emerging uses such as EV charging and battery storage are adding another layer to demand. However, the challenge for occupiers is the development of sites for a higher and better use, which has reduced the availability of sites.
For value-add investors, demand has been buoyed by these supply and demand dynamics, which have underpinned value preservation. In many cases, IOS sites were acquired with the intention of development; however, the sharp increase in rents has prompted these groups to revisit their strategy as returns may, in fact, be diluted post-development
