Unemployment remains high. Job growth is sluggish. Surprisingly, this hasn’t slowed the demand for industrial warehouse space and modern distribution centers across the Midwest, the nation and the globe.
That’s the key finding from a new report from Colliers International, its Global Midyear 2013 Highlights Report. The report, released July 8, says that while London, Hong Kong and Singapore enjoy the highest industrial rents, other markets across the globe are seeing a strong industrial market, too. The report says that industrial buildings across the world are operating near full occupancy.
According to the report, an estimated 40 percent of existing U.S. warehouse space is old enough to be considered functionally obsolete. What’s this mean? That demand for modern warehouse properties near ports and for modern inland distribution centers is on the rise.
In the Midwest, we’ve seen this in a market like Indianapolis, which is seeing its first build-to-suit industrial projects in years.
Internationally, though, is where the biggest uptick in industrial activity is taking place. There’s Mexico, for instance, where Colliers reports that 14 industrial properties are now under construction. Once complete, these properties will add more than 1 millions square feet of inventory to the market. An additional 2 million square feet are in the planning stages here, Colliers reports. This new square footage is expected to come online by 2015.
South America is seeing plenty of industrial activity, too. According to Colliers, the Bogota market absorbed more than 2 million square feet of warehouse space in the second half of 2012, 28 percent more than during the same period one year earlier.
KC Conway, chief economist for the USA for Colliers, said that he expects to see the industrial market continue its improvement in the coming months.
Through the end of the year, we expect to see market resilience, increased demand for logistics and distribution center space, and development driven by build-to-suits,” Conway said in a written statement.
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