Technology is the great disrupter. If traditional industries want to survive – let alone thrive – they need to keep ahead in a fast changing world of e-commerce, the sharing economy and the internet of things.
Real estate investment – in many cases, land ownership – is as traditional as they come, and technological innovation is wreaking havoc. But while office landlords worry about robotics, shopkeepers fret over online shopping and hoteliers decry Airbnb, owners of logistics warehouses have reason to be cheerful.
The most forward-thinking retail property investors have adapted today’s ‘multi-channel’ consumerism, but the logistics sector is the most obvious beneficiary of online commerce. The ability to order something on a mobile phone and have it delivered tomorrow, if not the same day, is becoming a normal expectation rather than a novelty. Logistics property owners can play their part in making that feat possible, all while the most affluent cities become ever more dense.
Institutional investment in logistics markets has boomed in recent years. But while online commerce has been grabbing the headlines, the phenomenon is not the sole reason behind the increase in activity. Investors are looking for steady, long-term income and diversification within their real estate portfolios.
In late-2012, IPE Real Estate covered the launch of IPD’s (now MSCI) first pan-European logistics performance report. The launch was in anticipation of a big increase in institutional activity in the sector, and James Markby, director at CBRE, said he expected a multi-billion-euro reshuffle of global logistics ownership.
Today, sovereign wealth funds and major pension funds are investing heavily in the sector, while several large platforms have been built up. There are a number of changes in ownership expected to play out this year. Singapore-listed Global Logistic Properties is understood to be close to being sold, and markets are waiting for Blackstone to sell its European logistics platform Logicor, most likely through a public listing.
See our in-depth section on logistics on pages 28-39 including analysis of Asia-Pacific, the US and Europe.
Technology is not only affecting real estate markets themselves. It has implications for fund management generally, and this could have particular nuances for the real estate sector.
In this edition we look at the rise of crowdfunding and ask whether this has any relevance to institutional real estate market. In short, it does. Read more on page 24.
And as Jos Short on page 26 writes, other forms of technology – from blockchain to fintech – could shine the spotlight on an industry that has always been a bit of laggard when it comes to transparency. It is likely to highlight all the more those managers with the best skills and expertise.