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Industrial Property Business: Industrial Real Estate Market Reports

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The Industrial Real Estate Industry

The industrial real estate industry concentrates on property used for industrial purposes such as industrial warehouses, distribution centers, logistics centers, recycling sites and power houses. This industry also caters to developing facilities such as manufacturing properties, energy management systems, temperature control rooms and storage units.

Prologis, DCT Industrial, IDI, Duke Realty Corporation and First Industrial are some major players in this industry.

Rexford Industrial, PS Business Parks, Public Storage, AMB Property and East Group are some major Real Estate Investment Trusts (REITs) in the industrial real estate industry.

Key Industrial Real Estate Market Segments

The industrial real estate market can be classified into the following categories:

Class-A Industrial: Includes high investment-grade properties with the highest sale prices and rents which are centrally located and offer efficient layouts and high quality floor plans. This kind of property is preferred by investors willing to invest in premium quality infrastructure. This class of property contributes to over 30% of the total rents of the industry.

Class-B Industrial: Includes infrastructure with lower rents and sale prices than class-A property. Such properties do not have special features and have ordinary design. They have average maintenance and are less sophisticated compared to class-A properties in their floor-plans, conditions and facilities.

Class-C Industrial: Includes property which is pre owned and offers only basic facilities. This type of property has the lowest rents and sales prices of all the three property segments. These properties are located in less desirable locations and have inferior mechanical and electrical systems. This class of property contributes to about 20% of the overall rents in the industrial real estate industry.

Industrial Property Regional Market Shares

The USA is one of the largest markets for industrial real estate. An expanding retail market has increased demand for manufacturing and shipping infrastructure. With the rise in e-commerce business, retailers like Amazon and Walmart are expected to further expand their investment in warehouse facilities. The US industrial real estate market has revenues of around $50 billion per annum. Foreign investors acquired about $2 billion industrial assets in this region in a recent year.

Europe is another important market for this industry. Attractive demand-supply dynamics and the rise of e-commerce have made European industrial logistics market lucrative for investment. Overall industrial real estate market in Europe has offered an attractive return on investment. Europe’s logistics property generated returns of more than 7% per annum consistently in recent years.

Asia-Pacific is another significant market for industrial real estate. The trend towards e-commerce has translated to an increase in space requirement in the logistics domain and warehousing across the region, including new mega fulfillment centers. This increase was particularly seen in Japan, Australia, China and Singapore due to higher yields, long lease terms, and low vacancy rates. Japan, China and South Korea hold more than 80% of the region’s larger warehouses.

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Search in Industrial Real Estate Industry (About 800 reports)
Parent industry: Real Estate
Related industries: Property Management, Residential Real Estate, Commercial Real Estate

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