Demand from e-commerce retailers (a major driver for logistics) should be relatively unaffected. E-commerce is likely to benefit from this situation as shoppers gravitate towards buying from the safety of their homes, which should support demand for 3PLs companies as e-commerce firms are major customers.
There may be increased warehousing demand for fresh food and medical supplies. In addition, the push for higher standards in the pharmaceutical and food industries could be a boost to cold chain logistics–one of the most demanding segments of logistics real estate.
Quarantines and supply chain disruptions, however, may lead to a decrease in Mainland China’s industrial production and exports resulting in a reduction in warehousing demand by manufacturers in the short term. Amongst Mainland China’s top trading partners, Japan, Korea and Australia may see weaker warehousing demand.
In the long term, more investment into modern logistics / smart warehousing presents an exciting opportunity for investors.