After understanding the role of the logistics industry in Hong Kong within the Greater Bay Area, we can explore models for investing in logistics real estate to meet investor needs and find a comprehensive investment strategy.

Traditional Logistics Real Estate Investment Model: ‘Build Warehouses, Then Attract Tenants’

Traditionally, real estate funds have preferred commercial properties like offices, hotels, shopping malls, and residential projects. They have shown less interest in traditional industrial assets, considering them lower growth and returns.

However, demand for traditional investment sectors has declined after the pandemic and under low economic growth in recent years. As a result, many real estate funds have become more conservative and shifted towards stable rental income from industrial or logistics real estate investments.

Logistics real estate is complex, standardized and highly specialized investment. Investors must understand logistics operations’ needs to increase asset value effectively. The Challenges are how to invest in Logistics Real Estate? Or how to secure the stable returns?

New Investment Model: Tenant Demand Prioritization

For investors, returns are paramount. The traditional model of ‘building warehouses, then attracting tenants’ raises doubts about returns. Instead, adopting a tenant-priority and demand-driven approach ensures stable income by involving tenants or operators in logistics assets.

Reitar Logtech Group has established a Property + Logistics Technology solution platform to identify stable, high-return investment projects for real estate funds. By prioritizing tenant demand, Reitar seeks operators and users/tenants to address demand issues and satisfy logistics operators’ needs for improved efficiency and competitiveness with lighter assets. Simultaneously, leveraging Hong Kong’s advantages in the Greater Bay Area logistics region, they collaborate with cities in the area to discover suitable investment opportunities.