Industrial Property Trends For 2024

The industrial property sector has been rapidly evolving in recent years.

Manufacturing facilities, warehouses, and distribution hubs have all been influenced by developments in technology, sustainability, and customer expectations.

Insider looked at some of the trends that are shaping the industrial property space for 2024 and beyond.

Smart Warehousing

 “The Gen Z market research shows shifting consumer needs as delivery expectations increase and organizations are seeking ways to demonstrate agility and flexibility in meeting customer demands,” said Isra Akhter, a senior consultant in the digital advisory team at CBRE. “As a result, they are increasingly embracing and leading the way in adopting technology, paving the way for smart warehousing.”

Doing this, involves using automation and real-time data to turn storage facilities into centres of efficiency, and Akhter described three main areas of smart warehousing:

1. Big data collected through the internet of things (IoT) devices and sensors, which “enables data-driven decision-making, allowing warehouse managers to optimize inventory levels, forecast demands and make informed strategic decisions.”
2. Artificial intelligence (AI), such as robots and automated guided vehicles [AGVs] and automating repetitive tasks to increase employee productivity.
3. Digital twins, which are virtual models of assets increasingly being used to simulate physical warehouses that Akhter said allows organizations to “monitor and optimise operations, leading to enhanced efficiency.”

Sustainability And Energy

Another key element of modern warehouses and factories is clean energy generation and usage.

 “We’re seeing with clients such as Tritax Symmetry – who have got a very developed sustainability strategy – on some of their big sites,” said Southall-Ghosh, the director at AEW Architects. “They’re looking at putting in whole energy centres where they’re centralizing the energy production on site through PV [photovoltaic] plus potentially CHP [combined heat and power] units and wind turbines, using battery storage to deliver that energy to the units.”

Andrew Pexton, regional director for the North West at industrial developer Harworth agreed.

“It’s all about clean energy and on-site generation” for factories and warehouses of the future,” Pexton said. “The bigger occupiers have got a very clear idea of what they want because of the corporate governance and their ability to absorb the cost of the ESG [environmental, social and governance] strategy.  Regarding mid-size and multi-let units, the bill costs are high, even before you start trying to put a load of ESG strategy in there, and, unfortunately, there’s only one person who’s really got to pay for that and that’s the occupier.”

Tenant Requirements

Neill Wood, the managing director of GM Property Management and George Moss & Sons, said that it is clear that there is a shift in what tenants require from their building and how it is designed.

“There is a lot more focus on EPCs, layouts, sustainability and generally creating a nice working environment,” said Wood.

George Moss & Sons announced a multimillion-pound investment into Moss Industrial Estate with the construction of six Grade A industrial units, totalling 26,000 sq ft.

“With the pace of regulatory change and customer demands changing, an old-school builder might say we’ve heavily ‘over-spaced’ these units,” Dave Willmore, head of estate for GM Property Management told Insider.

Some of the features include mezzanine floors, double-skin walls for soundproofing and insulation, solar glass and air source heat pumps, according to Willmore.

“Units of this size [3,500 to 5,000 sq ft] are in high demand and two out of six units are at the heads of terms stage and effectively under offer,” Wood said. “The feedback so far had been really positive and we are expecting a mix of existing and new tenants for the units. It’s about trying to serve the needs of the tenants before you know who they are, so we’ve made sure to have a diversity of layouts that would work for different uses – so one may be more suited for a manufacturing facility, one may be better for a trade counter.”

While sustainability and technology measures can be incorporated into the design stage for new builds, it can be more of a challenge bringing existing buildings up to modern standards, and making sure they’re future proofed.

Moss Industrial Estate included a number of older buildings and Wood said when a tenant moves on, they take it as an opportunity to refurbish the unit and implement a long-term strategy.

What Is To Come

According to CBRE’s Akhter, over the next decade, people can expect to see smart warehousing unlocking new levels of operational excellence and enabling organizations to enhance processes such as accurate order picking and packaging, and on-time delivery to customers, improving customer satisfaction.

“The vision of fully automated warehouses is becoming increasingly plausible and businesses who embrace smart warehousing will have a competitive edge in an ever-evolving landscape,” Akhter said.

Southall-Ghoush said that AEW Architects is seeing more super data centres across the country:

“Essentially they will still be large industrial buildings but specifically being used for data centres,” said Southall-Ghoush. “It’s connected quite a bit to AI. Currently a lot of data centers are congregated around the M4 Corridor because of the data connections there, but inherently AI has a bit of a data lag so they can accept a slightly slower connection and therefore there is more ability to push that outside areas with superfast connections.”

Southall-Ghoush said another trend which has been discussed for years is multi story industrial, but he cannot see this happening everywhere just yet.

“It’s only really a small number of schemes where people have been able to make it stack up and even then how successfully is debatable,” Southall-Ghoush said.

 

Source: Insider Media Limited