Is warehousing and logistics the new hot sector?
The Covid-19 pandemic has prompted a rapid rise in online retail sales. This is likely to see growing demand for warehouses and logistics services which could be a catalyst for the performance of industry operators over the long run.
One of the enduring effects of Covid-19 is likely to be a change in consumer behaviour. While the popularity of e-commerce had been growing for many years prior to the pandemic, lockdown measures have pushed an increasing proportion of shoppers from in-store purchases to online transactions in a short space of time. In our view, investment opportunities resulting from e-commerce growth are not limited to online retailers. Companies that provide warehousing and logistics for e-commerce businesses could enjoy rising demand for their services in the long run. Furthermore, the valuations of these companies could represent mis-pricings as a result of…