Over the past five years, global investment into industrial and logistics property has doubled, reaching a total of US$126 billion in 2017.

A sector traditionally prized for its stable income has recently seen dynamic capital growth, and logistics facilities now attract lower yields than retail property in some markets.

This evolution has been driven by exceptionally broad investor appetite for the sector, ranging from private equity vehicles and institutional funds to private individuals and families. Platform and portfolio transactions have become increasingly common among larger investors as they seek large-scale assets.

In Western markets, the rise in online shopping is one of the key drivers stimulating this apparently insatiable appetite, as retailer demand for modern distribution facilities continues to grow.

In Europe, rental growth forecasts for the sector are healthy, as stock is scarce and demand high. Asia-Pacific markets share these characteristics too.

However, as these five key trends demonstrate, they face an arguably more diverse mix of investment drivers, encompassing global trade, manufacturing growth and new infrastructure opportunities.

China moves up the value chain

China’s growth over the past 30 years has been largely based on its status as the workshop of the world. Today, however, the “Made in China 2025” initiative represents a concerted effort to move China up the value chain, with the ultimate aim being for China to compete globally in manufacturing innovative technologies.

Modern logistics facilities and high-tech business parks are seeking more investment to upgrade existing sites and regenerate older brownfield sites.

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Chinese investors have continued pouring their money into Thailand’s property sector even as the kingdom barrels toward an uncertain national election.

Thailand was the fourth-most-popular country for Chinese property investment in 2018, according to Juwai. With $2.3 billion coming in from Chinese sources, the Southeast Asian nation ranked behind only the U.S. ($30 billion), Hong Kong ($16 billion) and Australia ($14 billion.)

According to recent data from online Chinese real estate portal Juwai.com, Thailand was its most popular country when it comes to inquiries from potential real estate buyers in 2018 — climbing up from the sixth spot in 2016.

The impact of Thailand’s elections on its market and economy from CNBC.

That underscores the Southeast Asian nation’s enduring popularity with the Chinese — tourists from Asia’s top economy have for years seen Thailand as a top spot for holidays.

China’s continued economic slowdown is reshaping the country’s real estate market, as investor confidence remains high.

Tax cuts, increased infrastructure spending and demand from foreign investors will support China’s real estate market in 2019 in the wake of slower economic growth.

China’s economy grew 6.4 percent during the last three months of 2018, the slowest pace since the global financial crisis.

The property market accounts a meaningful proportion of China’s GDP growth and Beijing has, in the past, deployed stimulus measures to support the market.

But the government’s on-going effort to deleverage the nation’s financial system has prompted a new approach.

“Real estate plays a very important role and has a direct and indirect impact on China’s GDP,”

Daniel Yao, head of research, JLL China.

To keep property prices under control, the central bank is pumping more liquidity into the economy to boost consumer confidence and the government is pushing banks to increase lending while making widespread corporate and income tax cuts.

“Previously the government would loosen real estate policy in response to a major slowdown, especially in the residential market, but they remain strict,” adds Yao.

Fresh infrastructure investment is also expected to boost the economy but the focus will be less on mega projects such as new metro lines, highways and airports, and instead on technology and telecoms infrastructure, supporting 5G networks and investment in artificial intelligence, for example.

This will create demand in the office and logistics real estate sectors. What slower GDP growth means for China’s real estate market | The Investor

Higher interest rates, mortgage curbs and the unknown effects of the general election are among the risk factors for the local market, says CBRE

Danish physicist and Nobel laureate Niels Bohr famously quipped that “prediction is very difficult, especially if it’s about the future”. 

However this year will bring significant changes in the Bangkok property market, slower growth in many sectors and an incoming wave of new supply, according to CBRE, the international property consultancy.

The race for increasingly rare sites is still hot with the increase in land prices and scarcity of freehold land in prime locations.

However, with new regulations on the horizon and a new Bangkok City Plan scheduled to take effect in 2020, developers are taking a step back to assess the situation.

New regulations and uncertainties

 The real estate market will face a series of challenges, including a higher policy interest rate, tighter mortgage regulations, and the need to prepare for the expected introduction of the new city plan and a land and property tax in 2020.

As well, the general election on March 24 will have an effect on the economy and the progress of infrastructure projects.

Challenges in exports and tourism

Two key economic drivers of the economy, exports and tourism, will face challenges this year.

It’s still uncertain whether US-China trade tensions will have a negative or positive impact on Thailand’s export industry.

Meanwhile, winning back Chinese tourists remains the biggest hurdle for the tourism industry since the sinking of a tour boat off Phuket that killed 47 Chinese visitors last July.

Data on arrivals during the recently concluded Chinese New Year period will be watched closely as an indicator of…