Why APAC logistics investments remained lacklustre in H1

Investments remained flat vs last year at USD13.4 billion.

According to a JLL report, APAC logistics volumes reached USD 13.4bn in H1 (Q2: USD 5.6bn), remaining flat as a year ago (Q2: -27%). Limited investment stock and bid-ask gaps restricted investment activities in the sector. 

Here’s more from JLL:

While investors remained bullish on Japan logistics due to its stable income, investment was subdued because of the lack of large multi-tenant facilities available for sale. Yields are forecast to compress further in Tokyo. 

Australia logistics volumes grew as institutional owners continued to recycle capital to fund future development, while some offshore funds decided to divest while pricing remained attractive. Notably, Barings and Rest Super acquired a 12-asset portfolio from Goodman for USD 512mn.

The logistics market in South Korea was not active as bid-ask gaps remain wide. However, more properties are coming to market for auction, and investments focusing on non-performing loan items are increasing.

Investors were interested in Singapore logistics given its positive yield spread over interest rates, but most transactions were of smaller sizes. 

Hong Kong suffered from higher-for-longer interest rates and a weaker rental outlook. Some investors continued to acquire industrial assets to expand their self-storage portfolios.