Industrial transaction volumes in the first three quarters of 2018 (~USD 19.2 billion) are 29% higher than in the same 2017 period
Platform and entity level deals, capital partnering and joint ventures, and portfolio transactions are becoming increasingly common in Asia Pacific’s logistics sector.
The reasons why are simple – logistics sector fundamentals are strong, future growth prospects are positive, and accessing and getting scale in many markets across Asia Pacific are relatively difficult.
Investment sentiment in Asia Pacific is positive
Industrial transaction volumes in the first three quarters of 2018 (~USD 19.2 billion) are 29% higher than in the same 2017 period (~USD14.9 billion). Portfolio deals comprised an increasing number of these transactions.
In the first three quarters of 2017, there were an estimated 26 industrial sector portfolio deals. This rose to an estimated 33 portfolio deals over the same period in 2018. Finalisation of Mapletree Logistics Trust’s acquisition of CWT International’s five Singapore assets for around USD 532.1 million made it one of the largest portfolio deals this year.
Nonetheless, the opportunity to acquire core, stabilised, direct industrial real estate is relatively limited.
A significant amount of capital remains unplaced, with many investors finding it difficult to meet mandated targets. This in part has led to a rise in entity level deals (M&A), capital partnering and joint ventures.
A number of M&As have concluded recently across the region, including the ESR-REIT/Viva Industrial Trust merger, the first successful M&A in Singapore’s REIT sector. Capital is also partnering with owners and developers.
For example, CPPIB has teamed with Australia’s Goodman Group to acquire and develop…