Changing tenant mix across logistics markets

Chart blog

As dispersion of freight volumes across markets continues to rise, investors are required to understand and monitor logistics activity across both individual markets and specific asset geolocations at more granular level to maximise cash flow generation and value of their investments.

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

The chart below illustrates pre-COVID and post-COVID directional flows (in/out) of goods across top 50 European freight handling locations. The shaded area (gray) represents the typical cyclical fluctuations between flows at individual freight handling locations; calculated based on 5-year pre-COVID flows (+/- 1.5 st.dev), and the dots indicate the 3-year post-COVID balance of flows; gray dots represent locations where directional flows have remained stable and within typical ranges, and blue dots represent locations where there have been significant changes.

For markets where there has been a meaningful change in the balance of flows, investors may now begin to experience structurally changing demand for certain types of space. This is likely to impact changes in both tenant base and vacancy levels for certain types of assets.

Full profile across European and US freight handling locations available.

If you would like to discuss this note, monitor logistics activity across markets and specific geolocations of your assets or receive live activity data feeds to drive decisions across your business, please contact info@kaniaadvisors.com.