The demand, from e-commerce growth to last-mile logistics, combined with an abundance of institutional capital in the global market, are the forces behind the increase this year.
And the growth is not just in the U.S. — it's global. Strong interest in prime logistics assets continues in most industrial hubs around the world, with $85.8bn in total investment volume in the first three quarters of 2017, an increase of 12 percent year-over-year, according to the report.
Regional Trends
Overall, the prime logistics sector is performing well in the Americas, EMEA and Asia Pacific, supporting a healthy capital investment environment with steady yield compression in most industrial hubs. The logistics sector continues to be impacted by structural changes, such as online retailing, that have transformed global supply chains.
E-commerce operators require an estimated average of up to three times more space than traditional warehouse users due to a greater diversity in products handled and the need to have them immediately accessible. This has piqued the interest of global investors who continue to add industrial assets to their portfolios at lower cap rates, with the reasonable expectation that they will achieve immediate rent growth.
There is a growing trend of cross-border investment into industrial real estate, especially from Asia. Despite Chinese government restrictions on overseas investments as of late 2016, Chinese investors have acquired more than $773m in U.S. industrial real estate to date this year — equating to 89 percent of their U.S. investment total for all 2016.
