Heptagon Future Trends – Warehouses: Unsung heroes of the modern world

There is much more to warehouses than meets the eye. They are critical to the functioning of the global economy. From an investment perspective, the industry can be considered highly attractive, growing faster than global GDP, with demand heading only one way and supply being constrained. Demographics and technology are accelerating consumption patterns while every business has had to think about increasing supply chain resilience since the pandemic. Limited numbers of new buildings are also driving warehouse innovation. Future warehouses are likely to be both greener and more automated. Investing in logistics real estate businesses, or companies that operate in close adjacencies, can be a compelling strategy owing to the consistency of their returns across cycles. While there is a scarcity of pure-play assets, Prologis (an owner-operator of real estate) and GXO Logistics (a major contract logistics provider) stand out as particularly strongly placed beneficiaries, in our view.