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Logistics real estate should remain “resilient”
23 March 2020 | Vanessa Sousa

Despite the magnitude of the impact the pandemic Covid-19 will have on the real estate market still being unknown, the «structural trends point to resiliency for logistics real estate through this period and beyond, shaping both the fundamental and investment landscape».

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The risks posed by Covid-19 to economic growth would likewise affect real estate in the near term. Some segments are already feeling it, given the lack of demand, such as is the case of the office and retail segments. But, according to American giant Prologis in its latest report “COVID-19 and Implications for Logistics Real Estate”, the logistics segment should see a different reality. «This volatility could translate to higher demand for logistics real estate», due to 3 main reasons: rising inventory level continued e-commerce adoption and diversification of manufacturing locations.

And the source for demand should not change, since «many items that flow through supply chains are tied to basic daily needs such as food and beverage, consumer products and medical supplies», revealed the report.

The report further mentioned that the «sentiment towards the sector should remain positive, though near-term denominator effects could impact investment decisions», since «confidence around additional investments in logistics facilities may pause in this atmosphere of uncertainty».

From Prologis’s point of view «logistics is well-positioned to weather changes in real estate capital markets».