A new logistics cycle or simply the peak of the cycle?

According to Caio Nabuco de Araújo, real estate analyst at Empiricus, the current reading combines structural fundamentals with cyclical dynamics.

“Today we see very solid demand for the sector, which in our view has a structural character,” he says.

According to him, the growth of e-commerce accelerated a movement that should already have happened.

“This transition, in our view, should already have occurred given the need for better logistics infrastructure from both local and international players, especially those connected to retail and even technology.”

Even so, Empiricus maintains that “real prices still do not fully match replacement costs, creating room for further recovery, particularly in the premium segment.”

For Caio, supply constraints help explain the movement.

“Today, in a scenario where the cost of capital is high and there are labor bottlenecks, the pace of supply has not kept up with demand. In our view, this represents a specific phase of the cycle in which rents are being repriced until they reach a level that allows developers to resume building warehouses more intensively.”

According to the analyst, the moment is clearly favorable for property owners.

“Are we in a landlord-favorable market? In my view, yes. Indicators such as low vacancy, controlled supply, and contract cycles — with many leases from 2016 and 2017 currently entering revision periods — tend to strengthen landlords’ bargaining power.”

Still, he notes that the balance is sensitive to the macroeconomic environment.

“What could reverse this dynamic would be an economic slowdown, reducing tenant demand appetite and increasing credit risk.”

Although he does not currently see an “exponential supply overhang” on the horizon, he acknowledges that the sector has characteristics that allow relatively fast adjustments.

Any potential cap rate compression depends directly on the interest rate environment.

“It is possible in the context of Selic rate cuts,” Caio says.

“We are currently seeing the start of a cycle of interest rate cuts expected to begin in March, and depending on their intensity, we could see a repricing of real estate funds and, consequently, possible cap rate compression. At this moment, however, I do not see this happening in a straightforward way.”

Taking a different direction, Cy Capital decided to raise R$833 million to develop logistics warehouses from scratch, betting on structural supply constraints and territorial consolidation.

For Bruno Ackermann, partner and head of logistics at the firm, the current movement is not temporary.

“In fact, this cycle of demand growth is not entirely new. It began around 2020–21 in the post-pandemic period and was a structural movement rather than a temporary supply-demand imbalance.”

He argues that there has been a “behavioral, generational, and consumption habit shift” that has changed the sector’s dynamics.

The firm’s strategy is not centered on recurring income but on value creation.

“Development starting from raw land allows us to capture value in asset creation, not only through income. Once the warehouse is completed and leased, the strategy is to sell.”

According to Ackermann, the macro environment demands discipline.

“A more restrictive macro environment requires greater capital discipline from investors, which leads developers to be more selective in land acquisition and more efficient in execution.”

The contrast between the two perspectives reveals a central tension.

Empiricus sees a repricing phase within a favorable cycle but recognizes that the logistics segment has a shorter cycle and can adjust quickly.

Cy Capital, on the other hand, bets that supply constraints and territorial consolidation will sustain the cycle for longer.

If the Selic rate falls consistently, stabilized assets may benefit from cap rate compression. But cheaper credit could also stimulate a new wave of development, reducing the current scarcity.

On the other hand, a potential economic slowdown could weaken demand and alter landlords’ bargaining power.