The Asia-Pacific industrial real estate sector is expected to be the biggest gainer in commercial real estate in 2022 as supply chain issues remain at the forefront. Across the region, we have seen how the sector has capitalized on growth from 2021 onwards through the rapid adoption of e-commerce during the pandemic, in turn translating into demand for logistics space due to expansion fast e-commerce operations and omnichannel distribution.
Unsurprisingly, the sector emerged as the preferred sector for real estate investors for a third consecutive year in CBRE’s 2022 Investor Intentions Survey.
But with the 33% increase in logistics rents in Asia-Pacific since 2010, concerns are growing as to whether there may be room for further growth – logistics yields have rapidly closed the gap, yields offices going from 90 basis points at the end of 2019 to only 40 basis points at the end. -2021.
In response, investors looking for higher returns are turning to core-plus and value-added opportunities in logistics facilities that offer upgrade potential. The continued rise of e-commerce and the emphasis on speed and efficiency in supply chain operations means that occupiers are increasingly seeking automation and other technological improvements in their logistics facilities; for example, automated stacking systems, sufficient loading/unloading areas and backup power equipment for warehouse technology cold storage.
The Future is Green: Green Warehouses
An emerging trend worth noting, however, is the continued construction of more environmentally friendly, safe and hygienic warehouses and industrial facilities. A CBRE survey of logistics occupiers found that more than two-thirds expect more sustainability or green features in their facilities over the next three years.
For warehouses, going green can not only significantly reduce operating costs, but also offers clear environmental benefits. CBRE Global Supply Chain Advisory estimates that transportation accounts for 45-70% of total logistics occupant costs. With shipping rates increasing due to supply chain disruption and rising fuel costs, green warehouses offer occupants the opportunity to optimize costs where it counts.
Small wins add up
Industrial occupiers have an array of options to choose from when it comes to implementing sustainability features in new or even existing logistics facilities. LED lighting is a popular upgrade for pre-existing industrial units which, when combined with smart systems with sensors, can not only monitor lighting needs, but also land use. The system and its sensor network can be used for other types of resource management, such as gas and water, while sub-meters can monitor refrigeration units, machinery and other equipment for use. and energy savings.
Industrial developers who want to further improve the durability of current installations can perform thermographic inspection, using non-intrusive infrared imaging to identify uncontrolled heat gain or loss. Doors, walls and roof surfaces can be scanned to find possible upgrades.
Rooftops can also contain solar energy panels as a sustainable alternative energy source. They help reduce costs for the occupier or warehouse owner by providing less expensive energy to use in the building.
On their own, these improvements may seem piecemeal and insufficient, but when combined, they can yield additional gains in resource efficiency and cost savings. In Singapore, CBRE has been appointed to work with a microscope manufacturing company on the delivery of a transformative industrial project – a fully air-conditioned high-tech manufacturing plant (including warehousing and packaging) that will house the optical, assembly, research and development, warehousing and corporate headquarters functions all in one place.
When ready in 2023, this technology-driven industrial project, with 100,000 class cleanroom manufacturing spaces, will incorporate many of the aforementioned energy-efficient systems, meeting Green Mark Gold, FM Global requirements and implementing implements smart technology in line with Singapore’s Industry 4.0. standards.
Focus on worker well-being in green warehouses
Worker welfare is also another ESG issue that has risen to prominence, particularly in logistics where occupiers face labor shortages and rising labor costs. work. Cumulative labor costs in Asia-Pacific increased by 54% between 2009 and 2019, outpacing the gain of 25% globally and 5% in Europe during the corresponding period.
This is where green warehouses have a role to play in attracting and retaining talent. According to a Harvard School of Public Health study, workers in green building conditions performed better, with higher cognitive brain scores and improved performance,
Some features that occupants can consider implementing in their projects to support and improve worker comfort include insulation, which can save energy and improve working conditions. Cleaner materials like specialty paints, adhesives, wood products, sealants, and carpets can improve building air quality to ensure the long-term safety of workers in an otherwise hazardous or polluting environment.
In warehouses where cooling and heating systems may be less efficient with their large open spaces, high-volume, low-speed (HVLS) fans may prove effective in moving cool or warm air around the installation, to ensure worker comfort while reducing energy consumption. They can be useful even in climates that require air conditioning or heating.
CBRE helped the industrial facility of a leading Swiss instrumentation company in Aurangabad, India to comply with LEED Silver certification and FM Global standards. We have installed water-saving appliances to reduce water consumption by up to 20%, sensor lights inside the workshop and HVLS fans for added comfort. To mitigate the persistent high temperatures encountered in the area, insulation of the roof and side walls helped maintain a constant and comfortable internal temperature. Additional staff wellness facilities such as a crèche, occupational health centre, recreation area for staff to meditate and relax and a gym to unwind after a long day have also been added. were installed in the utility building.
When we think of a “green building”, we usually think of office buildings, given their ubiquity and the established framework of green certifications to optimize office projects. In the midst of the green revolution, we must now recognize the interest of sustainably designing another type of building: green warehouses.
Green certifications such as IGBC, LEED, GEM, etc. have expanded their scope to include warehouses, giving a stamp of approval and assurance that industrial facilities have been designed and built to sustainable specifications.
Since warehouses and industrial facilities occupy such a large geographic and environmental footprint, the long-term benefits of building them sustainably are manifold. Developing and managing sustainable industrial projects can help make companies more competitive and socially responsible while minimizing any impact on the environment. With logistics demand showing no signs of slowing down, there has never been a more crucial time to apply project management initiatives that promote sustainability, as well as the optimization of facilities, including those dedicated to storage. .
The author is from CBRE, the world’s largest commercial real estate services and investment firm,Vikram Vidyala is Senior Executive Director for Project Management.