Industrial Real Estate: E-Commerce Drives New Demand
When it comes to real estate, many people often think of residential properties such as houses and apartments. However, there is another aspect of the real estate industry that is often overlooked – industrial real estate. Industrial real estate refers to properties that are used for manufacturing, warehousing, distribution, and other industrial purposes. This type of real estate is essential in keeping businesses running and providing goods to consumers. In recent years, there has been a significant shift in the industrial real estate market, and it is all thanks to the rise of e-commerce.
E-Commerce Boom
In today’s digital era, e-commerce has become an integral part of our lives. With just a few clicks, we can purchase anything from clothing and groceries to electronics and furniture. This convenience has led to a surge in e-commerce sales, and it is only expected to continue growing. According to eMarketer, global e-commerce sales are projected to reach a staggering $6.5 trillion by 2023. With this massive increase in online shopping, businesses are in need of more space to store their goods and fulfill orders, which is where industrial real estate comes into play.
Changing Demand for Industrial Real Estate
The rise of e-commerce has caused a shift in the demand for industrial real estate. In the past, most industrial properties were located in rural or suburban areas, close to manufacturing plants and distribution centers. However, with the rise of e-commerce, businesses are now looking for industrial properties that are closer to urban centers and population hubs. This is because they need to be able to deliver their products to consumers quickly and efficiently.
Fulfillment Centers
The demand for industrial real estate has primarily been driven by the need for fulfillment centers. Fulfillment centers are large warehouses that are used for storing inventory, processing and packaging orders, and shipping products to customers. With e-commerce sales on the rise, businesses need larger fulfillment centers to keep up with the demand. These fulfillment centers are often located near major cities to ensure quick and efficient shipping.
Last-Mile Delivery
In addition to fulfillment centers, e-commerce has also led to an increase in the demand for last-mile delivery facilities. Last-mile delivery refers to the final leg of the delivery process, from the fulfillment center to the customer’s doorstep. With the expectation of fast delivery times, businesses need to have last-mile delivery facilities located close to their customers. This has led to a surge in demand for industrial properties in urban areas and near transportation hubs.
Investment Opportunities
The e-commerce boom has not only caused a shift in demand for industrial real estate but has also created new opportunities for investors. As businesses continue to expand their e-commerce operations, the demand for industrial properties is expected to grow. This makes investing in industrial real estate a lucrative opportunity. Additionally, with the shift towards more urban locations, industrial properties in these areas are also expected to see an increase in value, providing investors with a good return on their investment.
The Future of Industrial Real Estate
It is safe to say that e-commerce has fundamentally changed the industrial real estate market. The continued growth of e-commerce is expected to drive demand for industrial properties even further, with a particular focus on fulfillment centers and last-mile delivery facilities. This shift in demand has also led to new investment opportunities, making industrial real estate a hot commodity in the market.
In Conclusion
The rise of e-commerce has caused a significant shift in the demand for industrial real estate. Businesses are now looking for properties in urban areas and near transportation hubs to fulfill their online orders. This shift has also opened up new investment opportunities in the industrial real estate market. As e-commerce sales continue to grow, it is evident that the future of industrial real estate is bright.
