- Real estate assets are being repurposed, with commercial spaces converted into storage, distribution and warehousing facilities
- E-commerce driving increasing demand for industrial and logistics real estate
- Industry to play a vital role in the nationwide rollout of vaccines against COVID-19
The year 2021 will see robust growth in the industrial and logistics real estate sector, propelled by the unfolding of unparalleled events in the wake of COVID-19, predicts an executive at a real estate advisory firm.
Kash Salvador, director of investment and capital markets at Philippine-based Santos Knight Frank, said the unprecedented impact of the coronavirus disease has accelerated demand for this sector of real estate more than anticipated.
“The viability of this real estate segment proves to be undeniable with the increasing demand for warehousing, cold storage, distribution centers and the like, driven by e-commerce,” he said. “The lockdown in the country brought by COVID-19 has forced consumers to adapt and grow more comfortable with e-commerce platforms as part of their daily lives.”
He noted that 2020 saw the repurposing of real estate assets, with previous commercial spaces converted into storage and warehousing facilities. Furthermore, landlords offered competitive rates to gain market share of the growing demand.
But he also expects some of the repurposing to be temporary given that in the long term, “the asset will always be a function of land value.”
“As such in 2021, we expect a strong and healthy growth in the industrial and logistics segment.” This, he said, is in view as well of the industry’s vital role in the anticipated nationwide rollout of vaccines against COVID-19.
“We can expect the capital market for this industry segment to become more sophisticated. Venture capitalists and investment firms have placed this industry high on their list,” said Salvador.
In December 2020, CVC Capital announced their partnership with one of the largest logistics companies in the country, Fast Group. Salvador said this partnership “shows the global readiness of the asset type to be top of mind when investing in real estate.”
Photo by Han Chenxu on Unsplash
