In its 2H 2020 Industrial & Logistics report, Colliers noted the following:
- In the 12 months to June 2020, the industrial sector provided a total return of 11.6%, broadly split between capital and income return, and was above the 8.0% and -9.4% recorded for office and retail sectors respectively over the same period.
- The leasing market remains strong, underpinned by requirements from transport, retail and food logistics groups, but deals are taking longer to get over the line given the uncertainty on business operations and occupiers are increasingly staying put within their current facility.
- Investment hasn’t skipped a beat with the depth of capital from local and offshore groups remaining significant post COVID-19.
- Online retail sales have grown by over 80% in the year to August 2020 which is the highest annual growth on record, which has
translated into strong growth for warehouse demand.
- Colliers expect online retail is expected to gain further market share from the brick-and-mortar retail sector as consumers embrace
online shopping platforms which would translate into addtional warehouse demand of 2.7 million sqm by the end of 2022.
- The outlook for the industrial and logistics investment market remains positive and is expected to gather further momentum in 2021.
- As a result they expect further yield compression in the near term, especially given the spread between bonds and property yields being close to historical highs.