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Logistics : Rapid Modernisation Underway in the Asia Pacific Region

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Logistics : Rapid Modernisation Underway in the Asia Pacific Region

Until recently, the logistics sector in the Asia Pacific region (APAC) played a minor role among property types. The regional market for industrial properties in gen-eral—and logistics properties in particular—lacked an adequate pool of investible assets, which clearly limited asset liquidity. Moreover, problems persisted with transparency and in the depth of experience needed to manage and trade logistics properties. But the up-side potential was huge. The Asia Pacific region had become one of the world’s most im-portant locations for international trade. The region’s national governments recognized trade as an important component for economic growth and were willing to build a modern transport infrastructure to support it. Meanwhile, the region’s burgeoning affluence was reflected in the retail purchases of consumers.

In short, the stage had been set for the logistics sector to take off. It has since become one of the region’s most sought-after property choices among yield-seeking investors in the last two years. The trend is also being fuelled as yields in the office and residential sectors have tightened for prime assets in major markets. Structural change in the industrial sector, including advances in technology and supply chain management, have ushered in a transition in the form, function, ownership, management, and occu-pancy of these assets. From a demand perspective, the rapid increase in online retail sales has reshaped distribution channels and transformed the logistical process of deliver-ing goods. Shippers such as manufacturers and retailers have outsourced their logistical functions to third-party logistics firms (3PLs) in order to better manage their increasingly sophisticated supply chains. These 3PLs are now the primary occupiers in most of the major logistics markets in the APAC region.

Source : Deutsche Asset & Wealth management

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