A post Covid world in Industrial Real Estate

Commercial Real Estate is generally split into three distinct categories. Retail, we all see that category everyday at the shops at the shopping centre, the strip bulky goods area and the service station. Commercial, the offices we attend or the offices that accomodate our lawyers accountants and insurance brokers whether they are located in the CBD or the suburbs. Then there’s the lest understood and often ridiculed Industrial. The Industrial market is where all the products we generally purchase come from.

Given the downturn In Australian manufacturing almost everything we purchase comes in a container and is stored somewhere before it hits our shelves and more recently our mail boxes and verandahs dutifully delivered by either the postal service or our courier businesses.

So what has Covid -19 done to these markets.?

While the retail market is no doubt set for a tough road ahead however shopping preferences converting to e- commerce are now well advanced on where it might have been without the interruption of covid.

Commercial office requirements are no doubt going to be rapidly reviewed now that large sums have been invested in work from home technology and companies reassess their output requirements. No doubt the ultimate flexibility of work from home arrangements are going to difficult to fully reverse once the pandemic passes.

Industrial on the flip side is set to flourish in a post Covid-19 world. The signs are already present. Land values are holding firm and possibly heading North. Rental rates are firm and supply is firm into the future. Industrial is set to benefit greatly from the increase in e-commerce activity with some e-commerce logistics suppliers reporting 30% increase in throughput. Then there’s the new breed of social influencers who have seen the light and decided to work from home and start an ecommerce website supplier. They don’t want the product in their lounge they want the pleasure and convenience without the mess, and this is why this phenomenon is set to solidify post Covid-19.

If you want more detail around the thoughts above please call for a chat.