What Is Industrial Real Estate

Industrial real estate is a category of commercial real estate that includes buildings used for industrial purposes, such as factories and warehouses. The industrial asset class is a critical component of the global supply chain that keeps the world's goods moving from makers to markets and then to end use consumers, often located near major transportation routes in order to facilitate the shipping and receiving of goods. It is one of the most safe and risk adjustable investments on the real estate market due to its ability to adjust to a different economic situations and consumer trends.

Everything that you see around yourself was either produced, stored, distributed through industrial facility.

In another words industrial real estate is the broad term for manufacturing, production, research and development, storage and distribution facilities. It is the backbone of the economy and that's why it is one of the most stable real estate investments.

What drives demand for industrial real estate?

Consumption is the main driver of industrial real estate demand, which comes as no surprise since consumption accounts for the majority of all economic activity.

Trade is another key driver of demand. Industrial real estate facilities are key nodes in the global trading system, allowing the convenient and efficient movement of goods through the supply chain to end consumers.

Supply chain reconfiguration. In developing markets, companies are upgrading from smaller, outdated industrial real estate facilities to newer, larger industrial real estate buildings with modern features and upgrades. In all other markets, as the relative attractiveness of manufacturing locations and transit routes shifts, as new consumer markets rise to prominence, and as same-day and next-day delivery become the new normal, companies adjust nodes in their supply chains, driving demand for new industrial real estate buildings in new locations.

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References:

• https://www.doorloop.com/definitions/industrial-real-estate
• https://www.prologis.com/industrial-real-estate
• https://www.vts.com/blog/the-8-types-of-industrial-properties