Why AREITs like this one stand to gain from the rapid growth of e-commerce

A lot of focus has been put on the gains of successful ASX e-commerce shares. But more e-commerce also means more warehouse space.
The post Why AREITs like this one stand to gain from the rapid growth of e-commerce appeared first on Motley Fool Australia. –

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While a lot of focus has been put on the share price gains of successful ASX e-commerce shares, the companies that support them have garnered fewer headlines.

Nonetheless, alongside the rapid rise of e-commerce, the demand for quality logistics facilities to store and transport online goods is growing strongly.

Singapore’s Mapletree Logistics Trust said the rapid growth of e-commerce, particularly in Queensland, was a core reason behind its decision to invest $114 million in a Brisbane distribution centre.

As quoted by the Australian Financial Review (AFR) Mapletree noted:

In Queensland, e-commerce logistics distribution and warehousing has shown strong growth of 5.2 per cent annually, the highest of any state nationally. The COVID-19 pandemic has also spurred a major uptick in online shopping, particularly in the food, beverage and grocery sector. Consequently, surging sales of major supermarket players as well as consumer demand for fast delivery are translating to higher demand for prime logistics space with good connectivity.

For ASX investors, there are several real estate investment trusts (REITs) that hold a portfolio of logistics facilities that could stand to benefit from the growing demand for quality warehouse space.

Among them is APN Industria REIT (ASX: ADI).

What does APN Industria REIT do?

APN Industria is managed by APN Funds Management. The Australian REIT (AREIT) owns a portfolio of 32 quality industrial and business park assets located in Sydney, Melbourne, Brisbane and Adelaide. which is valued at $826 million.

Industria’s portfolio, valued at $826 million, provides tenants with practical spaces to meet their business needs.

How has the APN Industria share price been performing

APN Industria’s share price was trending steadily higher for 5 years, right up until the 21 February panic selling began. That saw it drop from its all time high of $3.21 per share all the way down to $1.74 on 23 March, a loss of 46%.

The share price has regained 52% from that low, and is up again today, but remains down 9% year-to-date. That compares to a 6% loss for the All Ordinaries Index (ASX: XAO).

But with the booming e-commerce trade driving demand for quality facilities, I believe APN Industria could retest its all-time high share price as we head into 2021. The AREIT also pays a 6.5% annual dividend yield, unfranked.

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Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The post Why AREITs like this one stand to gain from the rapid growth of e-commerce appeared first on Motley Fool Australia.

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