When many people hear the word “logistics”, they envision a storage facility such as a logistics centre or warehouse, or they envision transportation and delivery using large trucks loaded with cargo and container ships travelling between ports. However, this is not what the industry’s flow of operations reflects, this is only a small portion of logistics.
The flow of goods is referred to as logistics. The flow that encompasses all the steps and processes involved in delivering a company’s goods to consumers is “the essence of logistics.”
Storage facilities such as logistics centres and warehouses, as well as delivery by large trucks and transportation by ship and aeroplane, are just a few of the checkpoints along this supply chain. This flow eventually includes information processing in distribution systems to deliver goods; logistics is the flow for delivering goods.
Logistic properties, as opposed to retail or hotel properties, have benefited from the crisis in the Covid 19 pandemic. During the crisis, the systemic importance of logistics became clear, and demand for logistics and storage space was boosted further by the growing market share of online trading.
The industrial real estate market, like other real estate sectors, is growing, segmenting, and changing rapidly. The pandemic, as well as economic and technological factors, are reshaping the way warehouses are built and rented. Consumer demands and sociopolitical shifts are altering the landscape as supply chains embrace current trends in logistics and real estate.
A logistics property is a hall area used for storage, order picking, and product distribution. They frequently have a similar layout but differ in their use by the individual company, much like a warehouse but different in size.
This logistical property is responsible for supplying the last mile. The growing trend toward e-commerce necessitates shorter delivery routes to allow for ever faster delivery of more and more online orders.
Courier and parcel service providers use small-scale, decentralised properties as inner-city distribution centres. The increasing volume of e-commerce in the food sector presents a unique challenge. Fresh food logistics facilities must meet special technical requirements, such as cold storage areas and a scarcity of location within the capital, so multi-level solutions with flexible units should be developed and prioritized. Be it underground or basement distribution centres, or multi-story logistics buildings with separate external ramps. Flexible industrial city parks are also ideal for sales points, trading, services, and light manufacturing.
Because the coronavirus pandemic has had a significant impact on businesses and the economy both locally and globally, consumers have shifted their consumption activity to online transactions.
Many other changes are currently taking place that will have an equally large impact on supply chains and the use of real estate space.
Because purchasing patterns and technologies are changing so quickly, it can be difficult to keep up with the latest developments in the logistics and real estate industries.
Automated delivery innovations will further shape consumer purchasing habits and supply networks. The trend toward larger warehouses is likely to continue as relatively inexpensive warehouse space replaces more expensive retail space.
In addition, the market will see more hybrid logistics systems, such as shared warehouses, aerial warehouses hosted on roofs, and mobile warehouses hosted on moving vehicles, similar to how many F&Bs are migrating.
Investors may continue to be cautious, scrutinising portfolios before deploying capital for investments. However, when compared to other real estate asset classes, the industrial asset class may prove to be a safer investment option.
Demographic, economic, and technological megatrends will continue to drive retail and supply chain planning in the coming decade and beyond, raising the structural long-term growth rate of logistics real estate demand.
Changes in consumer behaviour are also expected to benefit e-commerce and e-payments, as evidenced by movements in essential commodities.
On the last note, Warehouses require more specifications for landlords to accommodate the increased adoption of technology, which has certainly changed the way logistics landlords must look at their assets.
In the real estate industry, fully automating these logistical areas necessitates new thinking about layouts and site infrastructure. New layouts will allow for a more efficient and safer workflow, where over-the-road truck drivers can quickly drop off and pick up trailers, as well as an easy trading platform for end-users if needed.
The writer Ismail Kamel ARM, ACoM is the Founder & CEO, IRES – Integrated Real Estate Services.
