BRRRRR, ITS COLD: Strong demand from online food sales is creating more opportunities for cold storage construction in the US. Shared by SAVANNAH SUPPLY CHAIN GUY, BILL STANKIEWICZ, 1-404-750-3200
Yes in the rapidly-evolving logistics market of 2019, cold is the new hot. That might sound confusing to those unacquainted with refrigerated logistics, but for anyone who’s been following this growing field, it’s right on target.
The demand for refrigeration in the supply chain is greater than it’s ever been. Numerous trends are pushing toward an increased capacity for refrigeration in logistics, and the logistics market is scrambling to keep up and to evolve in order to meet the newest developments. The CAGR for refrigerated logistics is forecast to reach 2.5 percent in the period from 2017 to 2022, so the time is now for businesses looking to lock in their refrigeration solutions.
There is a strong demand for cold storage warehouses driven largely by growing food sales and increased preference toward online grocery shopping. However, the cost and complexity of building these refrigerated spaces has made their development lag behind dry warehouse development.
CBRE previously forecasted that the growth of online food sales would generate demand for up to 100 million sq. ft. of cold storage space across the U.S. over the next five years.
The growing demand for cold storage space, along with growing investor interest and better understanding of how to build these facilities, will spur more speculative development in the near future, CBRE predicts.
An upside to the high capital expenditures and operating expenses is that occupiers tend to stay in the same facility for longer periods of time. This means cold storage facilities can command higher rental premiums than dry warehouses and occupiers are more willing to commit to longer lease terms.
In addition, CBRE says people can expect to see these three major shifts in cold storage development:
- More speculative development
- More development activity in small markets
- Greater automation in the design and operations of cold storage
- Bill Stankiewicz comments that more Venture Capital firms will be expanding investments here with food logistics
Have a great day today, be kind, help someone in need.
information here taken from https://www.cbre.us/research-and-reports/US-Food-in-Demand-Series-Consumers-April-2019