By Roberto Dib, Partner and Portfolio Manager BlueMacaw Renda + FoF
The logistics market continues to be one of the main promises for Real Estate investments in 2021, both for its risk profile and for the medium and long term appreciation potential. Much has been said about the sector’s resilience and how e-commerce has sustained the decline in vacancy at historical levels. However, it is important to differentiate the investment options available in the market, in particular, understanding which assets will actually benefit from such a secular trend, or from the growth observed in the long term, presenting less risk of vacancy and potential for appreciation.
The vacancy in the logistics sector in 1Q21 is around 13% in Brazil , with some more strategic regions showing vacancies of up to 1%. The demand for the new inventory comes from companies in the most diverse sectors of the economy, but in particular from the e-commerce sector, which has demanded warehouses in strategic locations and ideal characteristics for its operations.
The percentage of e-commerce sales in relation to total retail revenue is expected to continue to increase globally, going from 16% in 2020 to 22% in 2023 . In Brazil, e-commerce penetration is currently 10%  and the market expectation is that it will increase to 14% in the next 4 years, which represents a 40% increase in current demand. This increase directly impacts the logistics sector, since the online operation demands (i) up to 3.0x  more inventory than traditional retail; and (ii) well-located assets that allow express delivery, which has become a competitive advantage.
Large omnichannel retailers, which mix all sales channels in a single experience for customers, with a strong presence of e-commerce, have increasingly integrated the fulfillment, that is, the set of operations and activities from the customer’s request to the delivery of products, as a competitive differential, and within the logistical cost matrix, rent represents only 5% of the total cost .
Today, logistic FIIs (Real Estate funds) negotiate with a premium for the market average  (Dividend Yield Logistics: 6.2% vs. Market: 7.0%) sustained by the lower risk of vacancy and the potential for capital gain, as was demonstrated recently with the sale of assets from some public portfolios. In addition, the current average spread  between the dividend yield (last 12 months) of logistic FIIs and the risk-free rate is 287 bps, in line with the historical average and above the US market analog spread of 146 bps, that is, there is room for appreciation.
However, it is important to take an assertive position in the sector. The risk is mitigated by the secular trend related to e-commerce only for assets adhering to this type of operation. Some so-called “Logistic FIIs” are composed of industrial assets that are specific to the operation of the current tenant, or assets with secondary/tertiary location and specifications that would have great difficulty in leasing in the event of a vacancy, regardless of the price level offered.
When analyzing logistic portfolios, the investor must understand the profile of the assets from the following perspectives:
(i) Location: the closer to urban centers, the more positive it is from the point of view of online retail, especially for cities with a relevant consumer market such as São Paulo and Rio de Janeiro;
(ii) Courtyard of Maneuver: sheds ideal for e-commerce operations must withstand high traffic of trucks and V.U.C.s (vans and smaller vehicles), requiring space for maneuver;
(iii) Floor and ceiling height: for modern logistical management, the quality of the floor is important for the use of precision machinery, with a capacity of more than 5 ton / m² and a ceiling height of at least 12 meters, allowing vertical storage;
(iv) Docks: given the intense profile of product trafficking in this type of operation, a good number of docks is important for the entry and exit of products; among other factors such as sprinkler, distance between pillars, occupancy efficiency, among others.
In the graph below, it is possible to notice that there are FIIs adhering to e-commerce, with returns similar to FIIs with a more industrial profile, creating interesting investment opportunities, with lower risk.
When investing, it is always opportune to analyze and take into account whether assets and portfolios are supported and positioned to take advantage of these secular trends, as they tend to benefit the returns and the appreciation of these investments. Assets that combine good quality in construction standards and good location, are those that manage to fully take advantage of this stern wind, reaching further and faster.
 Cushman & Wakefield;
 Prologis Research;
 Deloitte, AT Kerney, IMS Worldwide, results of publicly traded companies, Prologis Research;
 Last annualized Mar / 21 dividend divided by market value;
 Economática, base date: 31 / Mar / 21;
 BlueMacaw note of assets adherence to the e-commer mercado-logistico-vento-em-popa_end.jpg ce takes into account the location, specifications and current tenants of the assets composed by the market FIIs;
 Last annualized dividend divided by the market value base date: 31-Mar-2021.