Invest in logistics real estate – Boursorama

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Invest in logistics real estate (Photo credit: 123RF)

With the development of e-commerce, logistics has acquired a strategic dimension. The real estate market is adapting accordingly, opening up new investment opportunities.

The real estate offer adapts to new logistical needs

With the explosion of e-commerce, the logistics organization has evolved to reflect the new expectations of consumers. The ability to deliver in shorter and shorter times has become a differentiating competitive factor.
E-merchants need warehouses dedicated to online sales and a territorial network that promotes proximity to consumption basins.

Large retail chains that rely on a large network of stores must adapt their model. Some have warehouses that serve both their stores and e-commerce customers. They manage store inventories and online sales in one warehouse.

Sorting, packaging of products, management of returns: the logistics around e-commerce has specificities and constraints compared to the more traditional distribution. It requires on average three times more storage space. This is why the majority of new logistics buildings today exceed 50,000 m².

This evolution requires a transformation of the housing stock to allow users to receive, store and distribute the products as quickly as possible. Changes in terms of size, volume, location but also on the technical level with for example the ability to integrate automated processes.

The logistics real estate market remains dynamic

Real estate developers have seized this trend and are investing more and more in warehouses, often at the expense of shopping centers. In addition to being booming, the sector has other advantages:

  • Expenses related to improvements to the premises are the responsibility of the tenant
  • Revenues are indexed to inflation
  • Leases are secure because they are signed on a long-term basis, on average for a period of more than 15 years for large warehouses.
  • According to the figures of BNP Paribas Real Estate, after three record years and an exceptional 2017 year (3,775,000 sqm marketed), the year 2018 shows a less dynamic but still records a good performance: at the end of September, demand placed in warehouses rises to more than 2.6 million m² (down 19% in one year).

    How to invest?

    For individuals, it is possible to access this market by buying shares of SCPI. A specialized SCPI on the business should soon see the day through the management company Alderan. It is also possible to access them via certain corporate SCPIs that diversify their real estate assets by investing in logistics warehouses (BNP Paribas, La Française, Paref).

    Another solution is to acquire shares in listed real estate companies that operate in this sector.