ANZ Capital Markets Investment Review
The Australian industrial and logistics sector has been brought to the forefront in 2020 with $5.49 billion trading (>$10 million), up 11.5 per cent when compared to 2019. The strong level of investment has come off the back of robust fundamentals within the sector including e-commerce growth, food logistics and infrastructure investment.
Despite investment volumes growing year-on-year, there was a 27 per cent fall in the number of assets brought to the market. As a result, the assets which did come to market throughout the year were competed for aggressively.
Given increased pressure on balance sheets, many industrial businesses are reassessing their capital needs to support their long-term growth. For this reason and coupled with the strength of the industrial and logistics investment market, sale and leaseback transactions accounted for 49 per cent of transactions by volume ($2.67 billion). Notably, this compares to approximately 28% in 2019.
NemoGiven the current economic uncertainty, investors are increasingly seeking strong non-discretionary covenants which have proven to be resilient in recent times. As a result, almost $2.0 billion traded from food backed tenants in 2020 while cold storage asset acquisitions totalled $694 million.