Despite global supply chain disruptions, logistics in Asia-Pacific continues to be a compelling area for real estate investors largely because of the way modernization has been transforming the sector, M&G's Lim said.
Much of the logistics-related activities such as product assembly, distributing, sorting and packing are now automated, which improves efficiency and drives retail consumption, which in turn drives demand for logistics spaces, she added.
"We don't see increases in vacancy rates, we don't see rentals falling — because companies are modernizing their upstream and downstream operations ... So modernization is helping the tailwinds behind logistics demand," she said.
In addition, companies have started diversifying their manufacturing and sourcing away from a single location such as China, which has benefited other markets such as Japan and South Korea "where they already have a lot of the components that used to be shipped to the place of manufacturing," she added.
For instance, when the Taiwan Semiconductor Manufacturing Co. was looking for a new manufacturing location, "they found that Japan had components and suppliers that nobody else had, they had very good quality control, very professional head count, and actually pretty low wages compared to global standards," she said.
"It did not hurt that the Japan government is matching dollar-for-dollar for the planned investment," she added.
The Japanese government planned to allocate $13.3 billion to support the country's semiconductor manufacturing capacity, Bloomberg reported in November.
TSMC on Feb. 6 said in a statement that it would build a second semiconductor plant in southwestern Japan that will start operations by 2027, bringing its total investment in Japan to $20 billion "with strong support from the Japanese government."
Industrial real estate such as specialty logistics and self-storage units in Asia-Pacific are also attractive currently, said Brad Fu, managing director, co-head and portfolio manager for private equity in Asia-Pacific at Heitman, which managed $51 billion assets as of Sept. 30.
Cold-chain logistics facilities, for example, are undersupplied in places like Hong Kong, where such operations are running at full occupancy in the market, Fu said.
"There is such a lack of supply for institutional-grade, licensed, and assets that are suited for needs and that are evolving… These are various temperature control facilities that range from frozen up to other temperatures for, perhaps, microchips," he said.
There is strong demand not only in Hong Kong but also in Japan and Australia for logistics real estate broadly, he added.
In August, Heitman sold a 50% stake in an Australian industrial portfolio for $383 million on behalf of South Korea's National Pension Service for Melbourne-based UniSuper. NPS had 984.2 trillion won ($729.3 billion) in assets as of Sept. 30, while UniSuper had A$124 billion ($82.1 billion) in assets as of June 30.