INDUSTRIAL
The global retail industry is undergoing a revolution . The retail supply chains of today , traditionally consisting of large distribution centres ( DCs ) will have had to shift to accommodate a reimagined customer with much greater expectations .
Long before the Covid pandemic began , DCs were being built in major South African cities to deliver products to retail stores where customers shopped . This often meant big box warehousing with well over 100 000 square metres to provide warehouse space for retailers such as Shoprite , Woolworths , Foschini and Dischem where they could stock sufficient inventory to meet surging customer demand .
A recent announcement by the online retail giant , Amazon , that it has too many sheds after doubling its warehouse space during the pandemic has prompted a challenging new reality , hand wringing and sharp reaction from investors . When Amazon informed the market that it intends to reduce its footprint of leased industrial space by as much as 3 million square metres , the share prices of many logistics warehouse owners tanked . For many real estate investors , the question is whether Amazon is the only user with excess warehouse needs in the current environment ?
Another trend that distribution centre owners need to deal with is an environment where a higher prevalence of e-commerce
132 AUGUST 2022 SA Real Estate Investor Magazine