What is industrial property?
Industrial property is a class of real estate like residential, commercial and retail—just a bit less glamorous. It doesn’t command the same center-stage attention as other types of real estate like residential developments or commercial officer towers. Industrial property includes:
- Storage facilities
- Distribution facilities
- Manufacturing facilities
- Production facilities
- Research and Development facilities
Industrial property is a key link in the global supply chain and a sought-after investment that generates strong and predictable cash flows.
Without warehouses and logistics distribution centers, which are key industrial property types, the global economy couldn’t function. Strategically located industrial property with easy and efficient connections to vital transit routes makes trade, e-commerce, and consumption possible.
What are the major factors that drive demand for industrial property?
First, there’s consumption. Industrial property is essential to the movement of goods across geographies to end consumers. Then there’s trade. It is a key component of trade everywhere—helping to ensure the efficient flow of goods from makers to markets. Rising volumes of global and domestic trade are possible because of the interconnected web of manufacturers, shippers, truckers, distributors and retailers. As companies reshape their supply chains to compete in the 21st century, they turn to high-quality, well-located, efficient industrial properties for operating leverage and competitive advantage.
Are e-commerce companies big users of industrial property?
Yes. Simply put, no e-commerce company can function without the right industrial property. They are not just quiet places to store goods. Industrial properties are fulfillment and return centers. They are the launching pads for direct-to-consumer delivery. In many instances, the last mile begins at an industrial property.
Where are industrial properties located?
Industrial property can often be found on large plots of land near highway junctions, rail terminals, airports, seaports, and other key transportation hubs. But as e-commerce continues to grow, it is becoming more common to see industrial properties occupying smaller footprints near large population centers – or even in multi-story locations in large cities.