Industry news Realogis – RLI Investors Group on the impact of corona virus on the property market for industrial, warehouse and logistics space:
Institutional investors – Massive capital reallocation in favour of logistics properties anticipated
In the USA, 30% of institutional capital is invested in the “industrial sector”, and this figure has been rising for decades. The majority is attributable to logistics. According to the Realogis-RLI Group, logistics properties currently account for almost 15% of allocated capital in Germany, compared with 7% over ten years ago.
“In the next ten years, the high-end logistics sector in Germany will see capital allocations of between 30% and 50% among institutional investors,” says Umut Ertan, founder and partner in the Realogis-RLI Group, confidently. “Residential and logistics are the most crisis-resistant asset classes within the property sector as a whole. Looking at commercial property alone, logistics is the most crisis-resistant asset class.”
The Realogis-RLI Group engages in a continuous dialogue with almost 100 indirect institutional investors, family offices, sovereign wealth funds and direct investors. They all confirm their intention to increase the proportion of their capital allocated to logistics. “Many are thinking about scaling back their investments in offices and business centres, large-scale specialist retail spaces, shopping centres and hotels or even eliminating them altogether,” adds Umut Ertan. “Over the next 12 to 18 months, logistics will see an unprecedented run in terms of capital reallocation.”