, APAC
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APAC cold storage investments could quintuple over the next decade 

Investment volumes could grow to up to USD5b.

Cold storage investments in APAC stand at approximately USD1 billion, and JLL says this has the potential to grow to as much as USD4-5 billion over the next 10 years.

With strong supply, a growing investor pool, and attractive returns, deal activity could increase on the back of these drivers, according to JLL:

 

  1. Expanding investible stocks: the region’s cold storage capacity has remained vastly underserved. This unabridged gap could potentially translate into nearly 500 million cubic metres of new supply. Roughly 10 to 15% of the existing total cold storage stock needs to be replaced with new stock. 
  2. Greater yields despite similar risk profile to general warehouse: Investors have started to consider cold storage’s favourable attributes into the risk equation. Longer weighted average lease expiry (WALE), higher occupancy, fixed rental escalation. Tenant strength is robust-mainstream occupier groups - F&B, pharma, and e-grocers - all part of nondiscretionary industry virtually insulated from economic downturns. We expect cold storage yields to compress at a brisker pace than general warehouse.

 

 

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