Analyzing the Impact of E-Commerce Growth on Logistics Real Estate Capitalization Rates : Focus on the ARDL-ECM Model

This study investigates the impact of e-commerce growth and interest rate fluctuations on the capitalization rate (cap rate), a key indicator of investment returns in the logistics real estate market. Utilizing quarterly time-series data from Q1 2008 to Q2 2024, the analysis focuses on the relationship between cap rate and explanatory variables including e-commerce transaction volume, logistics real estate supply, domestic government bond yields (3-year and 10-year), and the U.S. 10-year Treasury yield. To examine both short-run dynamics and long-run equilibrium relationships among the variables, the study employs an Autoregressive Distributed Lag (ARDL) model and an Error Correction Model (ECM). The empirical findings can be summarized as follows. First, e-commerce transaction volume exhibits a nonlinear structure in its effect on cap rates: it has a significant negative impact in the short run but becomes positive after a time lag, implying that demand growth initially depresses cap rates via asset price appreciation but later reflects market expectations and pricing adjustments. Second, the supply of logistics real estate significantly lowers cap rates in both the short and long run, with the long-run coefficient (-7.710, p < 0.01) indicating that increased supply, when supported by robust demand, can serve as a signal of market stability and lead to lower required returns. Third, the U.S. 10-year Treasury yield is found to be a significant external factor that increases cap rates, while domestic interest rates show relatively limited influence. This underscores the sensitivity of the logistics real estate market to global capital costs. Moreover, the error correction term in the ECM (-0.144, p < 0.01) confirms the presence of a stable long-run relationship, with deviations from equilibrium being corrected at a speed of approximately 14.4% per quarter. This implies that although the market is responsive to short-term external shocks, it gradually reverts to a long-term equilibrium level, reflecting an underlying structural stability. These results suggest that the logistics real estate market is increasingly influenced by global financial conditions, while the sustained growth of e-commerce contributes to long-term market resilience. Policymakers and investors are thus encouraged to design strategies that account for short-term volatility but also leverage the structural growth potential of logistics assets. By providing a quantitative framework to understand cap rate dynamics, this study contributes to a deeper understanding of logistics real estate valuation and offers practical insights for public policy, investment strategy, and asset pricing.