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E-Commerce Boom Triggers Industrial Real Estate Change

Volume 2, Issue 11
June 15th, 2014
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email“It appears that the future of retail is not more store or shopping centers but more warehouses and trucks,” declares the industrial real estate company of Cushman & Wakefield.

“E-tailing is the wave of the future,” it asserts. “Sales from online purchases make up a higher percentage of the total sales for traditional retailers than ever before. E-tailing will continue to outpace the growth of physical retail stores.”

C&W said online sellers have become the fastest-growing segment of warehouse occupiers. Warehouse vacancy has declined for 15 consecutive quarters, and demand for newly built, large distribution centers that cater to e-commerce has been particularly robust, the company pointed out.

“It is clear that industrial development is being driven by changes in the supply chain,” C&W said. “Developments in logistics and technology have driven the demand for newer and bigger warehouse and distribution centers. Supply chains must be more flexible and responsive, with distribution centers equipped with the latest technology.”

To keep larger stocks of inventory and to package and send out items in-house has created a need for bigger fulfillment centers, the company noted.

Not only has the square footage of new buildings increased substantially, but the average clear heights have risen and the total number of loading docks and doors has multiplied, the company reported.

Clearance height in the new facilities is often 36 to 40 feet to accommodate two mezzanine levels for picking and packing. Industrial projects with clear heights greater than 30-feet clear account for 78.3% of the total under construction.

C&W also said that new fulfillment centers also are differentiated from traditional ones by specialized features including greater building depth, with wider column spacing to accommodate a new generation of warehouse management systems.

They also include specialized material handling equipment and racking, and frequently are laid out with a cross-dock configuration.

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