In the last few years, we have seen a significant expansion in the logistics and industrial segment. 2020 was a milestone for the segment, mainly due to the new habits created during the pandemic, which led to the growth of e-commerce (electronic commerce), bringing new investments and investors to this class of assets.

It is possible to note the logistical segment's attractiveness, mentioned above, in real estate funds and their performance throughout 2020. In addition to the successful fundraising throughout the year, real estate funds in this sector ended the year being negotiated with a premium compared to the equity value.

Of the Real Estate Funds analyzed by the XP analysis area, the funds from logistical warehouses and real estate receivables got the best results in 2020, while the funds from shopping centers, slabs, and FoFs were the most affected.

Logistics Warehouses

Since the beginning of the pandemic, we have had major restrictive measures, social distancing, shop closures and companies adopting remote work for an indefinite period. Everyone had to adapt to the new reality, and it was no different for companies that invest in or use the logistics sector for the functioning of their ecosystem.

SiiLA Comment: it is correct to say that the adaptations noted in the Brazilian population's consumption profile, as COVID accelerated changes that were still showing themselves as medium and long-term trends. These movements had their force vector driven by emergency aid, this being the major risk for maintaining the current level of consumption of the population and, therefore, sustaining a sustainable expansion of the sector.

International Players

With the growing demand of the population for new classes of goods, we saw on the news that major international players are entering the logistics market to meet the constrained demands and increase participation in the Brazilian market.

According to SiiLA Brasil, three major companies have been expanding their operations since 2017 in the country; they are Mercado Livre, Amazon, and B2W.In 2020, international players had a gross absorption of 2.85 million square meters, with e-commerce responsible for 0.35 million square meters.

SiiLA Comment: Mercado Livre: captured in the last two years 87% of its total absorptions in the last five years, it was by far the fastest-growing e-commerce company in the last five years, being responsible for 54% of the sector's absorptions in that period;

Amazon: in the last two years, it captured 73% of its total absorptions in the last five years, being responsible for 24% of the absorptions of the e-commerce segment in the last five years;

B2W: captured in the last two years 72% of its total absorptions in the last five years, being responsible for 15% of the absorptions in the last five years.

RegionsIt is possible to analyze the Gross Absorption of International Players in Classes A +, A, and B (SiiLA classification) between 2016 and 2020. We can see that all the regions mentioned above had a positive gross absorption, emphasizing São Paulo and Rio Grande's Sul regions.

SiiLA Comment: As expected, the southeastern regions were the ones that reacted most to the positive tone that the market showed, with great emphasis on São Paulo. It is worth noting that regions in the Northeast and South also got excellent results, which brings an extremely favorable environment to these secondary markets, and understands that movements outside the RJ-MG-SP axis are justified for companies.

E-commerce

As previously mentioned, with the growth of e-commerce in the country, the companies' digital transformation process accelerated, which translated into an increase in their demand for logistical properties in this period. From the end of 2018 to the end of 2020, the e-commerce occupation increased from 4.81% to 6.98% - equivalent to a 2.17% growth.

SiiLA Comment: It is evident that the large volume of the area taken up by the e-commerce sector happened a lot more due to a movement of consolidation of the major players (mainly Amazon and Mercado Livre). This movement was responsible not only for expanding the volume of the area leased by these companies but also for increasing market share.

Conclusion

The logistics warehouse market projects continued growth in 2021. In addition to the International Players, there are also local companies, mainly retailers, which are being positively impacted by the healthy growth of e-commerce.

The point of attention will be negotiating and purchasing these assets in the best conditions without jeopardizing the investment or real estate fund's profitability, as the demand for great assets is increasing and prices are increasing.

Finally, we thank the partnership with SiiLA Brasil, for providing market information and its perspectives for the logistics sector, helping us to bring transparency and information to investors.