There is some evidence to suggest that fundamental REIT managers (“FRMs”) are largely trend followers. A large part of messaging from FRMs is comments on most recent performance of various sectors and messaging regarding expectations for secular trends or tailwinds in sectors that are already trending.

Kania Advisors provided unique market intelligence to a US-based private equity investment firm. This information provided unique granular insights to understand, benchmark and compare both logistics market dynamics and specific asset geolocation attributes.

In addition to changing freight volumes, another important dynamic for logistics investors to incorporate into their decisions is the impact on tenant base and tenant mix across changing markets.

In this note we evaluate the importance of geolocation specific attributes of logistics real estate assets on rents achieved at asset level. Understanding geolocation attributes is critical in estimating fair value rents at more granular level compared to general markets rents, valuations and pricing of assets as well as guiding investment and operational decisions in managing logistics assets.

In this note we highlight how geolocation attributes of transport traffic activity might impact pricing and risk characteristics of logistics real estate assets and how investors can both gain more granular insight when underwriting transactions as well as manage exposures more accurately on an ongoing basis.

In this note we use Kania Advisor’s geolocation analytics platform for logistics real estate to evaluate potential markets and locations across Amazon’s UK distribution warehouse network that could be exposed to weakening consumer and retail conditions. While we use Amazon to illustrate some key concepts, the platform provides analytics and ongoing live monitoring across a range of dimensions such as markets, locations, portfolios or single assets or any geolocation or user defined geography.

ML models can help to predict investment patterns in actively managed REIT funds and help analysts and investors to both stay ahead of likely trends and potentially harvest additional alpha from systematic or more focused approach to trading.

Road transport activity around logistics assets fell by ca -0.5% on average in the period until September compared to the same period last year. UK and Ireland and Benelux where the two regions that recorded the largest declines of -2.4% and -1.1% respectively.

There is significant and highly persistent component of real estate factors in listed equity markets that investors can target in a consistent and repeatable way to harvest alpha in listed real estate securities allocations irrespective of equity market conditions.