Property360Digest e-magazine Issue # 9 - 2021
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Industrial / Logistics
The survey respondents have strong convictions on the industrial / logistics sector which they opined should continue to perform well under current economic climate .
Allan Sim , Executive Director of Capital Markets , Knight Frank Malaysia , commented : “ It is understandable that the industrial and logistics sectors are favoured by the respondents as they remain the few resilient property classes that are still up and running during this volatile time . Appropriately , these very same sectors are being voted by respondents to be leaders charting the journey of recovery for the commercial property market .”
“ On this note , the survey also highlighted that the ecosystem for industrial and logistics is in unison as developers and fund / REIT managers ’ appetite for investments into the industrial / logistics sector are harmoniously complemented by lenders whom are also expressing higher interest in funding these projects / assets ”, Sim added .
Sim also commented : “ When examining further , we noted that the market is perceiving the impact of MCOs to be more severe for manufacturers that are reliant on human workforce , as compared to logistics that are deemed to encounter less downside risks amidst lockdowns and may even flourish by way of e-commerce substituting general retail . However , attention has to be accorded to the facet of logistics that are serving the manufacturing sector , of which demand will be subject to the disruption of supply chains on a global scale .”
“ All in all , we concur with the respondents ’ anticipation for an increase in rental and occupancy rates for the logistics sector . This will act as a strong support for the potential of increase in capital values of logistics assets and further reinforcing the standing of logistic assets class as a darling amongst the investors , fund managers and developers ” Sim concluded .
More than 50 % of respondents expect to see a spike in the capital values of healthcare ( 60 %) and logistics ( 58 %) assets .
In the office and retail sub-sectors , about half of the respondents expect the capital values to hold while in industrial and institutional segments , the percentages of respondents are higher at 67 % and 70 % respectively .
In the hotel / leisure sub-sector , 78 % of respondents expect capital values to fall .
“ The market is perceiving the impact of MCOs to be more severe for manufacturers that are reliant on human workforce ”