Technological Disruptions: Trends Guiding the Future of Warehousing Space

PropTech

Technological Disruptions: Trends Guiding the Future of Warehousing Space

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Industrial & Warehousing real estate is one of the key interest areas for institutional investments in the developed nations. Yield Rates/ Cap Rates used to be higher than office due to uncertainty. However, it is now trading in close range to other commercial assets. Demand for the Warehousing spaces is expected to grow in line with e-commerce, which is growing at a brisk rate. This segment is poised for annual double-digit growth for next 5 years and beyond.

However, industrial and warehousing real estate is more dynamic than it seems. Strong demand is fueling innovations in logistics and mobility that are set to transform the supply chains. In future, this transformation could invalidate many of the current assumptions about supply, demand, and the operating costs.

This article examines key technical innovations which are expected to have a big impact on the automation of industrial and warehousing spaces. It also covers how smart warehousing is shaping up and constituents of the same.

In the next 5 years, the way industrial properties are designed, operated, and valued might change more compared to other commercial assets. Demand for industrial uses is expected to shift into completely different locations and even different asset types.

Therefore, demand for industrial spaces is expected to remain strong but risk involved is still high for investors and the level of expertise required to do well is also high.

May 2021