No surprise, industrial and logistics investors emerge the winner

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LISTED property companies across Australia, saw varied results over this past financial year, with those funds with highest exposure to the industrial sector outperforming the rest.

According to the latest Real Capital Analytics Insights, COVID-19 made for a mixed bag of results for Australian listed firms, performances were largely decided by how weighted to each asset and sub asset class companies were.

With the industrial and logistics sector continuing to hold strong over the year, those heavily weighted towards this sector outperformed those which were more dependent on office and retail.

The latest finds comes after RCA’s head of analytics Pacific Benjamin Martin Henry revealed in Australian Property Journal’s Talking Property podcast that for the first time in history, industrial demand has outstripped retail and offices combined.

Over FY21, investors upped their deployment into the industrial sector by 57% or $1.3 billion, in the third consecutive year for growing investments in the sector.

Correspondingly, the industrial sector also saw the fewest assets offloaded, with only $745 million of assets being disposed versus nearly $4 billion of acquisitions.

Having said this, with convenience retail still dominant, those with high exposure to such assets also brought in strong results. With neighbourhood shopping centres also outperforming other asset types, while major shopping centres have failed to pick up.

Investors have largely focused in on sub-regional, large format and neighbourhood shopping centres, as a result.

In the largest increase of the core sectors, funds nearly doubled their allocations into the retail sector, when compared to the previous financial year. This resulted in a net position in excess of $1 billion in the sector.

Meanwhile, the office sector continued to be plagued by pandemic induced changes to the workspace landscape, with deployment into the sector dropping by 46% or $2.6 billion over the year.

31% of total acquisition volume was made up of office property acquisitions, which is well below the five year-average of 43%.

While disposals were up from the five-year average of 46%, accounting for 61% of total volume for the year.

With workplaces shifting to more lifestyle rich and near to home areas, outside of CBDs, the office sector saw stronger results in suburban offices, with $1.3 billion invested for a 140% increase.

On the other side of this, less desirable CBD office acquisitions fell by 65% to $1.8 billion.

Across all sectors, deployment was down by 10% on the previous year, with the pandemic still leaving many listed companies with a murky vision of the investment space. With firms acquiring $9.9 billion and disposing of $5 billion for a net positive of $4.7 billion.

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