Robust economic conditions, the entrenchment of globalisation and outsourcing trends and the buoyancy of inter- and intra-regional trade flows have underpinned strong demand for logistics services in Asia and fuelled the growth of the region's logistics industry in recent years. As countries shift their manufacturing focus, often in response to threats from manufacturing giant, China, they are likely to look for competitive advantage in such areas such as supply chain management and efficient use of capital. Such trends may result in more investment opportunities in logistics real estate. Increasing consumerism within Asia means a higher volume of goods moving within the Asian countries as well as across their borders.
According to Datamonitor, the Asia-Pacific logistics market generated total revenues of $291.3 billion in 2008, representing a compound annual growth rate (CAGR) of 10% for the period spanning 2004-2008. The performance of the market is forecast to accelerate, with an anticipated CAGR of 10.1% for the five-year period 2008-2013, which is expected to drive the market to a value of $471.5 billion by the end of 20131.
Many multinational and Asian logistics players have expanded or are starting to expand in Asia in order to support the growing presence of their international clients in Asia. In addition, infrastructure development and increased consumer consumption in the region is expected to fuel logistics operators' business which is likely to translate into positive demand for logistics real estate in the respective Asian markets, especially for Hong Kong, Singapore, Korea and the gateway Chinese cities of Beijing, Shanghai and Guangzhou.
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1 Datamonitor, “Logistics in Asia-Pacific”, August 2009