The industrial & logistics property sector became the hot favourite in 2020, outperforming all other property types. 

The rise of e-commerce has driven major brands to expand their footprint and therefore leasing activity.  Vacancy rates are at all-time lows and major development work is underway to meet demand.  Several AREITS are continuing their growth in this asset class and Transaction volumes were up to $3.5 billion in 2020, from $2.3 billion in 2019 – as recently reported.

So, what makes the sector tick?  Here are some attributes and advantages of the sector from our perspective.

Construction and development advantages

• Over time construction costs in the sector have been less susceptible to escalation than other asset types.  This stability provides greater confidence to Developers when planning their next project.
• The speed of construction enables Developers to receive a return on their investment earlier than most other forms of development.
• Tried and tested construction techniques in the sector generally lead to less variations than other forms of construction.
• There are also tax depreciation benefits available to developers / investors upon project completion. Continue reading →