[:he]Published in Mezzin Logistics, The Marker, Commercial Department, July 2019
“Logistics” has become a magic word in the real estate investment market in the last year. Similar to the book that became a hair stylist, and the cook that became a chef, the gray area that until recently was described as a “warehouse” has become the dream of institutional real estate investors, foundations and private investors. How did this happen and is it a worthwhile investment? | Yair Levy
Internet commerce, which has revolutionized shopping and consumption habits all over the world, and gained tremendous momentum in Israel in the last decade, has also changed the warehousing and logistics industries and the commercial real estate market in their face. Over the years, there has been a drastic decrease in commercial activity in stores and malls, and on the other hand, the demand for transporting goods from Israel has increased to the country and store them until they are delivered to the customers, – which increases the demand for storage and logistics in an unprecedented way. But if it appears on the face of it that an investment in a property that has tremendous demand will yield a safe and stable return, then in Israel, as in Israel, the picture is always a little different. The field of logistics, whose profitability is a result of efficiency, is actually managed by two types of players. On the one hand, we see the large marketing chains that distribute through the marlogs that they own goods from their suppliers to the points of sale all over the country. The logistics activities of these chains are conducted as an independent and profitable profit unit, which receives payment in the form of a substantial discount on the price of the product, for the distribution work. There is profitability here as well, but today the very profitability depends on the nature of the ownership of the logistics asset. If the property is not owned by the logistics company but rented, the logistics prices no longer leave room for profit.
Why are the prices only rising? Because the demand for logistics areas is on a sharp rise, while the supply is almost non-existent. The increase in demand stems from the need for logistics due to the internet revolution. Also, when the interest rate in the economy is zero, trade is declining and there is a flood in the office market, it is found that investors are looking for a profitable channel, the demand for logistics prices, their attractiveness is great, and God forbid. And so, in the last two years, a situation has arisen in which the prices of land designated for logistics in the central region are skyrocketing. At such prices, is it economically viable to establish a MarloG? Assuming that the MarloG uses only about 60% of the land (45% cover, 15% gallery), then in order to receive a reasonable return from a MarloG that sits on a dunam of land, one must receive approx. D of about NIS 60-70 per month”. The second alternative is to build a two-story apartment building, but this too is only possible under certain land conditions and even then part of the building will be lower. This price reflects the square meters designated for commerce and not the square meters designated Logistics where the glass ceiling that customers are willing to pay is up to NIS 45 per square meter built in a one-story building whose net height is 12.20 meters. They can withstand an internal return of 4-5% since the alternative of this money in the bank is close to zero. We all pay the price of the expensive cost of the land for the marlogams in the price of the final product. in which the mail’s distribution center in Modiin was sold under a 15-year contract at a yield of 5% emphasizes the tremendous demand for the logistics sector on the one hand and the availability of money on the other. Assuming the deal is good today, will this property have a second round? In 15 years, if the postal authority does not renew a contract, will the owner of the property be able to rent it at a higher price or even at the same price? Even if it is a modern building and in an excellent location, you have to take into account that every day technological innovations are presented in the industry. The demand for efficiency and the lack of manpower is pushing the industry in the direction of automatic warehouses that make better use of the area, with high ceilings (30-40 meters) that are operated without human contact. Engages in the field, and even when the yield is high, the frequent changes in the industry and the tremendous technological development in it, make the investment risky in the long term. /section>[:]
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