Industrial space demand to rise for in-city logistics

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    Property consultancy Colliers sees an increase in demand for logistics and warehousing near the metropolis or on the fringe to better service the growing needs of electronic commerce.

    In a report, Colliers said there will be demand for additional storage space as companies try to manage their supply chains.

    “As businesses rethink their lean-inventory strategies, an increase in e-commerce operations and need for more “safety stock” positioned near the cities will spur demand for warehousing,” Colliers said.

    While capital values are expected to decline in the near term, Colliers said demand for near city or in city warehousing may offset the negative impact of corona virus on industrial/logistics values in the medium term.

    As such, Colliers suggests that developers look at near- city or in- city logistics to support surge in e-commerce.

    “If possible, repurpose some vacant in-city buildings as last mile storage,” it added.

    Colliers said disruptions in the global supply chain will impact export- oriented industrial developments. However, food manufacturing will largely remain unaffected.

    Demand for in-city logistics will grow as people’s shopping habits shift from brick and mortar to online.