Logistics and biotech
The funds’ advance in logistics properties, such as warehousing and goods distribution centres, comes at a time of high demand as people have bought everything from toilet paper to trainers from home during lockdowns.
So far this year, logistics have accounted for about 22% of funds’ real-estate investments by value, compared with 15% in 2019 as a whole, the Global SWF data shows.
Meanwhile, investments in offices have fallen to 36% from 49% last year, and in retail property to zero versus 15%.
Marcus Frampton, chief investment officer at the Alaska Permanent Fund Corporation (APFC), told Reuters that real-estate deal volumes had “slowed down substantially” in general, but that, anecdotally, he saw activity in industrial facilities like logistics and “multi-family” apartment blocks.
The wealth fund’s holdings have risen to $4.7 billion, up from $4 billion at the end of June, after the purchase of multi-family and industrial REIT stocks on July 1, Frampton said.
“Commercial warehouse activity is strong,” he added.
In a sign of the times, Temasek participated in a $500 million investment in Indonesia-based e-commerce firm Tokopedia in June.
In contrast, physical retail, a significant part of many funds’ holdings, has been hit hard. QIA-owned luxury retailer Harrods in London has reportedly forecast a 45% plunge in annual sales, as visitor numbers plummet. Many other retailers have sought to renegotiate rents.