Is it still worth investing in logistics real estate funds after 2020?

This market niche has been very busy with more players’ entry due to the favourable moment, thus imposing greater competition for assets and regions, especially on the Rio-São Paulo axis. This competitiveness has made it difficult to allocate funds and has led investors to question whether there are still excellent opportunities to be explored in the sector.

If the investor were to judge by one of the most well-known metrics in the FII market, he would have the impression that logistics funds are expensive. Almost 70% of the 16 assets in this class that are part of Ifix, the segment’s benchmark index at B3, traded above book value in January, according to a survey by Quantum Finance at the request of InfoMoney.

With the demand for good logistics warehouses increasing, especially in regions closer to large urban centres, the point of attention will be negotiating these assets in the best conditions, without jeopardising the real estate fund’s profitability, points out a report by the SiiLA consultancy with XP.

With a market on the rise, the search for more logistics spaces has led to an increase in assets’ supply. According to data from SiiLA, the new expected additional stock of warehouses for this year in São Paulo is of the order of 1.5 million square meters, which represents about three times the total delivered in 2020.

Giancarlo Nicastro, CEO of SiiLa, says that this is the first time since 2016 when there is a delivery expected to exceed 500 thousand square metres in the state. He recalls that, at that time, the generous offer resulted in a high vacancy rate, which closed the year at around 30%.

Today, however, he argues the scenario is different. Although there may be an increase in vacancy, the market is heated and characterised by several pre-locations, with companies leasing even before the shed’s construction to guarantee the space.

Nicastro draws attention to the drop of around four percentage points in the vacancy rate in high-end warehouses (A + and A) in São Paulo, from 17.8%, in the third quarter, to 13%, in the fourth, and says he expects a recovery in rental values this year with a resumption of the economy in general.