THE CHANGING FACE OF INDUSTRIAL: HOW THE LOGISTICS MARKET IS BEING - PowerPoint PPT Presentation

Land & Development Conference 2016 THE CHANGING FACE OF INDUSTRIAL: HOW THE LOGISTICS MARKET IS BEING IMPACTED BY ECOMMERCE AND OTHER TRENDS

Clicks to Bricks

Recent Store Closings / Restructuring

Expanding Online Retailers

Expanding Large Format Retailers

The Supply Chain Model E-Commerce • Growth in e-commerce sales is 5x greater than traditional retail • On-line buying visits grow 10x more than brick and mortar locations First Mile Distribution Hub Last Mile • Mega DC • Cross-docks • Urban warehouse fulfillment centres • Connecting sea ports to intermodal hubs • 150,000 – 250,000 SF • Close to roof tops • Sears Canada Vaughan DC • Costco Brampton DC • To support swift response times – same day delivery • Walmart Etobicoke DC

E-commerce Influencers 1. Click to Doorbell : Instant gratification 2. Speed of Delivery : Delivery expectations 1. Fast for 2013 was 4 days 2. Fast for 2014 was 3 days 3. Fast for 2015 was 2 days 4. Fast for 2016 is next day 5. Expectation 2017 is same day 3. Always Open : Shop when/where you want “Get Local”

E-commerce Impacts 1. Individual retailers cannot match Amazon’s “Get Local” capability 2. Less square footage of retail space and more square footage of logistics space 3. Substantial increase in e-commerce fulfillment centres in large cities 4. Substantial increase in the e-commerce click/collect in small cities/rural 5. Increase in need for reverse logistics

Changing Existing Building Operations Real Estate Challenges Business Concerns Portions of warehouse converted to e-commerce fulfillment

Speculative Development Trends & Concerns • Site Coverage - high requirement for trailer parking, and employee parking impacting site density Real Estate Challenges • Power Requirements – Energy intensive pick & pack operations, conveyers will require large power • Building Design – Decrease in Business Concerns truck level doors and increase in Oxford Airport Business Park, Calgary van level doors Adaptability of site designs

Industrial Market Sector Disruptors • Who is going to come out ahead? • What do you see as threats to the market? • Where will new development be located? • Will occupiers pay more for space that truly fits their needs? Same Day Delivery Internalizing Supply Chain

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