August 14, 2022

Image credit: Fueloyal

Why are warehouses the newest trendy property in Asia?

Warehouses are hot property all around the world, even though they aren’t fashionable and don’t have chandeliers or luxurious furnishings.

But why is that? In a nutshell, it’s because businesses, particularly retailers, are running out of space to store all of the items we acquire online.

Since the pandemic began at the end of 2019, online shopping has increased by 43.5 per cent to $2.87 trillion (£2.1 trillion) globally, with Asia accounting for nearly half of it, according to market research firm Euromonitor.

For months, the global supply chain problem has dominated the news. Behind it is a web of interruptions affecting everything from industries to the shipping industry in Asia, the United States, and the United Kingdom, as well as a driver shortage.

What you may not know is that this has aided in the near-full use of warehouse space around the world, with vacancy rates at record low levels. It has been especially noticeable because so many of the products we buy are manufactured in and shipped through Asia.

Companies like RedMart, one of Singapore’s largest online grocers, require larger facilities and increasingly rely on automation to meet increased demand.

Thousands of orders pass through the facility each week, which is close to Singapore’s border with Malaysia, one of the country’s largest imports.

The warehouse holds around 100,000 items at any given moment. Because of the quick turnover of goods, they’ll all be gone in three days and replaced with new ones.

According to a recent CBRE survey, more than three-quarters of companies using warehouses in the Asia-Pacific area stated they want to expand in the next three years, suggesting that demand for warehouse space will continue to rise.

With the increase in demand, warehouses are expected to become more automated and taller.

This method of doing business, however, is not without its detractors. People have been worried for years that machines will replace them, and the thought of warehouses taking up more and more land is also unpopular.

However, as people buy more and more things online, businesses will have to expand to keep up with demand.