Why are all the investors talking about getting into industrial?
Traditionally, industrial buildings have been used for manufacturing purposes more than anything and warehousing was a mere component. Today, the investment scene relative to industrial real estate has changed and this has been brought about by a need for space for two major industries which have been on the rise in recent years. Because of this, warehousing has become more popular in industrial spaces today.
Factors Impacting the Industrial Real Estate Scene
First, when the Liberal government legalized marijuana this led to the repurposing of vacant or older buildings which have been idle for some time into indoor farms. Geographically speaking, there is only one growing season in Canada and indoor farming gives growers the option to have a controlled environment which can result in increased yield––harvesting anywhere from two to four times a year. While not all growers have chosen to go for indoor farming per se, all growers require space to grow their crop which results in a need for land. As such, vacant or idle industrial buildings are either being occupied or absorbed for this purpose.
Second, the pandemic has changed consumer behavior in ways that have a palpable impact on all types of businesses. Because of this, business owners have been forced to adapt to keep their businesses going and growing. Over the past five years, online shopping has become more prevalent. This has resulted in budding businesses being able to sell products without a brick-and-mortar store or a rented space for people to visit. The ease of online shopping coupled with the pandemic and its effects on day-to-day activities has made e-commerce boom even more.
In the second quarter of 2020, the amount of retail purchased via e-commerce jumped by 16% of the total sales. This is a huge spike which clearly signifies realization from people who have never bought anything online and now found an alternative way to buy things safely and remotely. Retailers recognized this and now are rushing to get the amount of space that they need for logistics purposes. Products (from businesses of all sizes) operating on e-commerce platforms need a logistics center or warehouse where their sorting and delivery operations take place. Some have multiple logistics hubs so that the products can be shipped out to various customer locations in an efficient manner.
Lastly, there is the growing market of industrial bays as well. Given the rise of smaller businesses opening up and some businesses scaling down due to the pandemic, the need for anterior office space with warehousing at the back is also growing at a rapid pace.
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More in-depth information on why investors are talking about getting into industrial real estate will also be discussed, along with how YOU can take advantage of this growing need for industrial space especially in Western Canada. InvestPlus REIT doubled the size of the company amidst the 2020 pandemic and are continuously acquiring industrial buildings. Their goal is to increase the asset base within InvestPlus REIT to 100M dollars by the end of 2021 and to hopefully surpass that in 2022.
Domenic Mandato, President and CEO of InvestPlus REIT will cover these areas as well as trends and growth opportunities for the next 24 months using current market figures and personal examples.
