Returns for industrial real estate have been close to the highest of all property types. But is there room to grow? Signs are pointing to yes, due to e-commerce’s contribution. With the ability to track, store, analyze and apply information, more efficiencies will be built into supply chains. Online retailers keep higher levels of inventories, have a wider range of products, and support direct-to-consumer shipping and returns, which translates to a need for more space. Given consumers’ penchant for immediacy of product delivery, demand for secondary industrial markets that are located closer to people are expected to emerge.
Sources:
NAIOP, Industrial Real Estate Fundamentals and Investment Outperformance