Share: Share on Facebook Share on Twitter Share on LinkedIn I recommend visiting cushmanwakefield.com to read:%0A%0A {0} %0A%0A {1}

Is Industrial the new Retail?

12/2/2021
With bricks and mortar retail suffering under the weight of the pandemic, the sector has increasingly moved “online” with a resultant boom in e-commerce. In turn this has driven demand in the industrial sector for warehousing, logistics and supply chain solutions.   

The industrial sector has shown both its defensive and growth qualities, which has piqued investor interest, driving both record investment volumes and sharp yield tightening. Occupier demand has also increased, especially for assets in close proximity to high quality infrastructure, or that can fulfil last mile delivery commitments to meet soaring e-commerce activity. 

In simple terms, rolling annual investment volume for industrial assets in Asia Pacific exceeded investment volume for retail assets for the first time in Q2 2020. Since then, industrial investment has soared such that as at Q3 2021 rolling annual industrial investment volume had reached USD46.8bn compared to USD39.3bn for retail. In line with this, top-quartile transaction industrial capitalisation rates are at record lows of 4.2%, down from 4.9% a year earlier  

However, the sector is not without its own headwinds.  The pandemic, as well as other exogenous factors such as natural disasters and portside strikes, have also caused problems for supply chains. The fragility of just-in-time inventory has been brutally revealed with corporates now opting to hold more safety stock, which has driven further demand for warehousing space. Over the longer term, many companies will seek to redesign their supply chains, not only in response to the acute issues experienced over the past 18 months but also considering longer term, structural changes that were already underway prior to the pandemic. In turn this will shift demand for industrial space across the region as each company seeks to create the optimum combination of efficiency and responsiveness to meet their customers’ needs.  

The geographical connectivity of South East Asia immediately places these markets at an advantage, supported by their low-cost base and increasing maturity. Some manufacturers have already begun expanding their operations in these markets to help diversify production. More advanced markets will likely benefit from reshoring of key, “mission critical”, elements of the supply chain. Securing last mile sites will become increasingly competitive across the entire region as digital penetration and e-commerce continue to grow.  

On a broader front, the growth in intraregional trade in Asia, due to consumers across Asia consuming more of the goods manufactured in Asia, will drive new investment opportunities in manufacturing and logistics infrastructure.  Priorities when configuring supply chain networks will be speed to market and proximity to consumers, and modernisation of industrial and logistics infrastructure will be critical to take advantage of the growth in intraregional trade.

More Two Minute Reads

Is working from home dead?
Insights • Workplace

Is working from home dead?

2021 saw a 77% increase on office demand, is a mass return to work driving the change? 
12/2/2021
Economic growth meets talent shortage
Insights • Workplace

Economic growth meets talent shortage

What happens when the world’s leading growth region, can’t find people to grow with it.
12/2/2021
Can community drive commerce
Insights • Workplace

Can community drive commerce?

How building communities can result in higher rents, a competitive edge, and tenant retention. 
12/2/2021
Flex is the next big thing
Insights • Workplace

Flex is the next big thing

It’s no longer just about offering flexibility at work, but also in office space. 
12/2/2021
APAC leads the world in growth
Insights • Investment / Capital Markets

APAC leads the world in growth

Asia Pacific is forecast to return to world leading growth in the second half of 2022, which is maintained into 2023. 
12/2/2021
Occupiers not to have it all their own way
Insights

Occupiers not to have it all their own way

The window of opportunity is starting to close for occupiers across Asia Pacific.
12/2/2021
Hybrid work model, the APAC way
Insights • Workplace

Hybrid work model, the APAC way

Asia Pacific’s experience is likely to be different to the rest of the world.
12/2/2021
What’s hot for investors in 2022?
Insights • Investment / Capital Markets

What's hot for investors in 2022?

Creativity might hold the key in boosting returns
12/2/2021

クッシュマン・アンド・ウェイクフィールドでは、トラフィックの分析および本ウェブサイト上でベストの体験をお客様に提供するためクッキーを使用します。このダイアログを閉じ、お客様の同意を確認されるか、詳細については次のページを訪れてください:
クッキー通知

その他のオプション
同意する
これらのクッキーにより、当社のウェブサイトが期待通りに動作することが保証されます。例えば、ウェブサイトのトラフィック負荷を当社のサーバー間で分散し、使用量が特に多いときにウェブサイトがクラッシュしないようにします。
これらのクッキーは、お客様が行った選択(ユーザー名、言語、居住地域など)をウェブサイトに記憶させ、より充実した機能を提供するためのものです。これらのクッキーは、広告に使用される可能性のあるお客様の情報を収集したり、お客様がインターネット上でどこにいたかを記憶したりすることはありません。
これらのクッキーは、当社がマーケティングパートナーと協力して、お客様が当社のウェブサイトに訪問する前にどの広告やリンクをクリックしたかを理解したり、当社の広告をお客様にとってより適切なものにするために使用されます。
すべてに同意する
すべてを拒否する
設定の保存