1 ASX share to ride the viral logistics boom

When the coronavirus struck, Australians shifted to online shopping. But e-commerce shares aren’t the only ones likely to benefit.

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When COVID-19 first reared its ugly head in Australia on 25 January, no one could have foreseen the massive impact this would have on our health, lives, and share markets.

The resulting lockdowns and ripples of panic saw ASX share prices across the market tank. The S&P/ASX 200 Index (ASX: XJO) fell 37% in a single month, hitting the bottom on 23 March before a strong rebound rally began.

While most ASX shares suffered sharp falls during the panic selling, not all shares suffered equally. And not all shares have rebounded as quickly, leaving some bargains on the table.

The rise of e-commerce

With people locked in their homes or mandated to maintain safe social distancing, brick and mortar retailers were among the hardest hit by the measures put in place to contain and eliminate the virus. Most have yet to recover the big share price losses suffered in February and March.

E-commerce shares largely went the other way.

Take online retailer Kogan.com Ltd (ASX: KGN), for example. The Kogan share price was ravaged during the initial market rout, falling 50% from 17 January through to 17 March.

Since then, it’s been a wildly different story. At the time of writing, Kogan’s share price is up 403% since that low. Year to date it’s up 168%.

Now Kogan’s share price, alongside other online focused shares, may well have further to run. But here’s the thing. The rapid increase in online shopping is also seeing a rise in the demand for the warehouses to support that.

1 ASX share to capture 53 industrial property assets

ASX share prices in the logistics market have largely lagged the rapid rises we’ve witnessed in the leading e-commerce players. But as demand for quality, well-situated warehouse space and logistics services heats up, that could be about to change.

One way to gain access to a portfolio of property assets with a single ASX share is via real estate investment trusts (REITs).

From the logistics side, there are a few REITs to choose from on the ASX.

One that looks particularly well positioned is the Centuria Industrial REIT (ASX: CIP), which is part of the ASX 200.

The trust holds 53 industrial assets, worth $2.1 billion as at 5 August. 90% are located on Australia’s east coast, close to key infrastructure.

And, according to Centuria, some 60% of CIP’s income comes from tenants “directly linked to the production, packaging and distribution of consumer staples, telecommunications and pharmaceuticals.”

Centuria Industrial REIT’s share price had been performing strongly, up 30% over the 12 months to 21 February, before the COVID panic selling kicked in. From 21 February CIP’s share price fell 39% through to the low on 23 March.

The Centuria Industrial REIT has gained 37% from that low. But the share price is still down 7% since 2 January, potentially offering investors a profitable entry point.

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Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of Kogan.com ltd. The Motley Fool Australia has recommended Kogan.com ltd. 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.

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