Traditionally, institutional investors targeting the logistics and industrial sector have preferred to invest in larger warehouses at 15,000 square metres (160,000 square feet) and over, often close to transportation hubs and corridors.

These types of buildings offer relatively good liquidity and an underlying tenant base consisting of well-known large multinationals and third-party logistics providers. Banks have also had a preference to finance larger buildings with creditworthy tenants, further driving demand from investors.

Although occupier demand has been strong, larger warehouses represent a more bulky re-letting risk, in particular if it goes with a substantial component of office space. Because of their out-of-town locations, there is often ample availability of land with development potential, so these assets carry a risk that tenants leave at the end of the lease term to a newly developed property next door. Furthermore, large multinational companies and thi