What factors drive the multiple on invested capital (MOIC) in logistics?

The choice of income yield and modest appreciation as the correct factors driving the multiple on invested capital (MOIC) in logistics is grounded in the characteristics of the logistics real estate market.

Logistics properties often generate income through long-term leases with creditworthy tenants, which contributes to a stable income yield. This yield is critical as it reflects the cash flow generated relative to the investment made. A higher income yield suggests that the properties are performing well financially, thereby positively influencing the MOIC.

Modest appreciation is also a key factor because logistics properties are usually in high demand due to the growth of e-commerce and the need for efficient distribution networks. This moderate appreciation can stem from increasing property values in prime locations or improvements made to the asset that enhance its operational efficiency. Together, a reliable income yield and consistent, if not explosive, appreciation create a favorable environment that supports a higher MOIC.

Other options do not capture the essentials of logistics investment dynamics as effectively as this choice. For instance, while interest rates and depreciation can have some impact on overall real estate investment, they are not specific drivers of MOIC in the logistics sector. Likewise, high occupancy rates and low expenses, although generally desirable, don't directly correlate to MOIC as effectively in this context