A triumphant year of logistics deals

As investors shift their focus from retail to industrial, the sector’s deal activity for 2019 looks likely to exceed $160bn – a record level, observes Real Capital Analytics’ Jim Costello.

Traditionally, the retail property sector captured a larger share of global investment in income-producing properties than the industrial sector. A decade ago, the retail sector represented 25 percent of global activity with the industrial sector capturing only a 10 percent share. The industrial sector was viewed as a boring, stable market with generic properties, unlike the retail sector with its glamorous properties. Into 2017, however, boring became sexy and the industrial landscape steadily gained more attention from investors globally, with the sector pushing above the 10 percent share of market activity. In the four quarters to Q3 2019, industrial represented 16 percent of global investment activity versus only a 13 percent share for the retail sector.

This steady climb in investor interest has translated to record-high deal volumes. Activity for the first three quarters of 2019 was essentially on par with the trend set through the first three quarters of 2018. Figures for Q4 are not yet finalized, but the sum of what has been recorded as closed plus all projects under contract would push activity for 2019 ahead of the pace set in 2018.

Blackstone was behind the most significant industrial deals in 2019. Two different entities of the firm bought portfolios of assets from GLP for a total price of $18.7 billion.

Those two deals may represent somewhere between 9 and 13 percent of global industrial investment activity for 2019 when all the figures for the year are finalized.