The rise and rise of
INDUS T RI A L PROPER T Y DE V EL OPMEN T
e-commerce From a change in demand driven by the growth of e-commerce, the profile of the industrial property industry is evolving. LISA WITEPSKI rounds up the trends
REIT’s Louwlardia Logistics Park
E
Fields adds that despite the wide range in e-commerce adoption, particularly -commerce has traditionally of industries making use of logistics real for food, fast-moving consumer goods, accounted for just 1-2 per cent estate, the disruption to brick-and-mortar pharma and health-related products of retail sales - but that’s set to retail - and on logistics supply space in should support demand for modern change, growing to up to 3 per particular - is likely to be limited, because logistic real estate.” cent or even 5 per cent, thanks to consumer spend is In addition, overflow COVID-19’s impact, according to Ridwaan expected to remain space has also been Loonat, property analyst at Nedbank CIB. subdued in the short- to required as a result In fact, Loonat says that Prologis puts this medium-term. of the need to create number closer to 20 per cent. That said, there is contingency in the supply The ramifications are significant: with likely to be greater of goods due to the impact e-commerce taking up three times the demand for logistics of COVID-19. Surges in space that a bricks-and-mortar store centres suited to demand for certain goods, would need per dollar of sales, it’s meeting the needs of as recently experienced clear that demand for distribution the e-commerce market due to the pandemic, centres and urban warehouses is Bruce in terms of location and may require a rethink set to grow. Fields design, especially given of certain supply-chain The change is already taking the growing demands management aspects place, says Steven Brown, CEO of on delivery timelines as the national as suppliers may seek to bolster Fortress REIT, reporting that the footprint for key e-commerce service supply of certain highcompany’s vacancies in the providers continues to develop. demand goods.” logistics space is in the low digits, while Bruce Fields, national director of JLL, says “The increase in e-commerce adoption, particularly for food, that one national retailer fast-moving consumer goods, pharma and health-related has reported a 200 per cent online boom, thanks to products should support demand for modern logistic Steven Brown COVID-19. “The increase
real estate.” – Steven Brown, CEO, Fortress REIT
Warehouse design SIZE MATTERS
Warehouse design is changing to accommodate the new demand on the sector.
Warehousing design is changing on two levels: on the one hand, there’s a growing demand for bigger, mega-distribution centres capable of serving an entire network, according to Corne van Rooyen, head of industrial, commercial, education, hospitality and mixed-use property at Fernridge Solutions. “But changes are unlikely to be immediate: the planning, design and construction of additional warehouses and logistics takes time, so many local retailers ›
COMMERCIAL PROPERTY
21
