Report: Changing trade patterns a boon to U.S. industrial real estate – DC Velocity

Shifting global trade patterns will benefit U.S. industrial real estate markets, especially as companies move some production away from China and increasingly look for ways to diversify their supply strategies, according to a recent market report from Los Angeles-based real estate services and investment firm CBRE.

Among the most notable trends, according to the report, is the adoption of a “China-Plus-One” strategy, in which companies shift some of their production from China to lower cost export countries in the region. Vietnam is positioned to benefit most from the shift, due to its proximity to China, fast-growing economy, and network of 114 seaports, the CBRE researchers said. Vietnam posted the largest year-over-year trade growth with the United States in 2019 compared to other Southeast Asian countries and is “one of the few countries in the world with positive trade growth with the U.S. through the first half of 2020,” the researchers also said.

The shift to Vietnam largely benefits West Coast ports, but interior air-hub and East Coast ports benefit as well. A broader expansion to secondary markets in Asia is fueling growth for logistics markets in the Southeast in particular, as organizations take advantage of lower cost Asian routes to the U.S. East Coast via the Suez Canal; recent improvements to Southeast ports’ intermodal capabilities are also helping to drive the trend.

“This will be a demand driver for Southeast logistics markets including Charleston, Savannah, Atlanta, Greenville, S.C., and Florida’s I-4 Corridor,” according to the report.

Nearshoring may benefit

Global Real Estate

Author: Global Real Estate