What a difference a Month can make! Although no one can be sure how many behavioral changes will be permanent, but one thing looks almost inevitable and that is increased desirability of well located Industrial Real Estate.
There are two major factors why we have become even more bullish on Industrial asset class.
1- The increased penetration of online shopping is here to stay. The safety measures put in place by governments to fight the pandemic have forced more and more shoppers towards online shopping. Some of them might come back to Malls once this situation is over but some might stick to the convenience of shopping from the click of their finger. This will result in increased demand for warehouse space.
2- The difficulty of procuring essential supplies from abroad during this crisis has been an eye opening experience for most of the Developed world. We believe a major shift is going to happen in the Government policies going forward. The decades old practice of procuring basic supplies from cheap labour countries is no longer an option. The Western governments including Canadian and Ontario will likely promote and protect the domestic manufacturing and storage of various Goods which are now considered 'Essential'. This will again require more manufacturing and warehousing space.
Based on these premises we are recommending all of our Clients to increase their exposure to Industrial asset class. There will be temporary closures of smaller and weak tenants but we strongly believe this will give rise to some great acquisition opportunities for a very limited time period.
Post a comment