The Impact of a Declining Chinese Economy on Its Industrial Real Estate Sector

In recent years, China emerged as the world's fastest-growing major economy. However, in 2024, its economy has significantly slowed, presenting major challenges across various sectors. This downturn is attributed to factors like decreasing global growth, trade protectionism, and geopolitical tensions, alongside a persistent decline in domestic real estate, slowed investment growth, demand fluctuations, trade conflicts, and an aging population. These issues have led to a critical examination of their effects, particularly on the industrial real estate sector. Given that industrial real estate encompasses warehouses, manufacturing plants, and logistics facilities, its performance serves as a key indicator of economic health. As China navigates these economic challenges, it is essential for stakeholders to understand the implications for this vital area.

As a global manufacturing powerhouse, China boasts a vast industrial real estate market, primarily fueled by its robust supply chain and export activities. However, the ongoing economic downturn poses significant challenges for the industrial real estate sector. It's essential for investors, businesses, and policymakers to grasp these changes to effectively navigate the upcoming obstacles. The decline in exports and domestic consumption has resulted in reduced demand for manufacturing space, prompting many industrial real estate developers to reassess their strategies. Additionally, as companies seek cost-efficiency, advancements in automation and smart technology have rendered some traditional industrial spaces obsolete, leading to higher vacancy rates.

Given these challenges, one might question if there's still potential for growth in the industrial real estate sector. While immediate optimism may be uncertain, the overall trend suggests a positive outlook. Firstly, the government's initiatives to promote economic rebalancing are underway, potentially creating new opportunities. China is gradually transitioning from an investment-driven growth model to a more balanced approach that emphasizes harnessing consumer potential—as highlighted by recent policies aimed at addressing the needs of an aging society—and the flourishing service industry.

In this context, industrial real estate is poised for a transformative opportunity. Companies must adapt to evolving consumer preferences by optimizing logistics chains and distribution networks. The rapid growth of e-commerce, for instance, has significantly increased demand for logistics infrastructure, offering numerous opportunities for industrial real estate stakeholders. To thrive in this shifting landscape, relevant parties should proactively adjust their strategies, seize these opportunities, and realign their business focus to meet the new logistics demands driven by e-commerce, enabling their own transformation and advancement.

Through these adaptive measures, the industrial real estate sector can align with new economic development trends while securing a competitive edge in a challenging market. Additionally, there are indications that China is strongly promoting and investing in green technology and sustainable practices across industries, including real estate. Developers are beginning to incorporate environmental protection initiatives into their projects, ensuring that this transformation aligns with broader sustainability requirements.

For stakeholders in the industrial real estate sector—including developers, investors, and tenants—it's essential to adjust strategies to keep pace with the evolving landscape. To mitigate current risks, developers must leverage innovative technologies to enhance operational efficiency and cut costs. This could involve reconfiguring existing spaces to accommodate new demands sparked by the e-commerce surge or investing in smart technologies that lower energy expenses and streamline logistics.

Investors should adopt a cautious yet optimistic approach, focusing on non-performing assets in emerging areas that still hold promise for long-term growth. Forming partnerships with local governments can facilitate knowledge sharing and improve access to resources, enabling investors to navigate current challenges while capitalizing on future opportunities.

In summary, while the ongoing decline of China's economy poses significant challenges to the industrial real estate sector, it also creates a foundation for transformation and innovation. By recognizing shifts in demand, embracing sustainable development, and implementing proactive strategies, stakeholders can weather economic fluctuations and seize new opportunities that arise as the market evolves. Thus, the industrial real estate industry finds itself at a crossroads, requiring continued attention and active preparation for the challenges ahead.

Summary of investment attraction strategies

Justin Lee

Leaders personally attract investment methods.

The ability, level, credibility and charisma of government leaders are important guarantees of foreign investment confidence, and the first element, first image and first attraction of a regional investment environment.

Therefore, in the investment attraction work, especially in the important stage of seeking breakthroughs, government leaders at all levels should be both commanders and soldiers, blow the charge horn and build river bridges, so as to personally meet important merchants, negotiate major projects in person, coordinate major issues in person, and accompany major inspection groups in person, which is to create a The key to the new situation of regional open economy.

[Case] The rapid development of Kunshan City's use of foreign capital has put great pressure on neighboring Wujiang County. However, after the new secretary of the county party committee of Wujiang County took office, they attached great importance to the work of attracting investment. They broke the cauldron and sank the boat, and fought against the water. Important foreign businessmen came. Four groups in the county received high-standard reception, and if there were any problems with the merchants, the main leaders of the county came forward to solve some problems, which deeply moved the foreign businessmen and invested in Wujiang's letter My heart is greatly increased. Now the county's investment attraction is developing rapidly, and it has a high and low momentum compared with Kunshan.

Sincere investment attraction method

The key to attracting investment depends on credibility, and only with credibility can we win the trust of merchants. Attract investment with sincerity",

Integrity is fundamental, and sincerity is the foundation.

Therefore, in the process of attracting investment, both leaders and investment attraction personnel should really stand on the perspective of investors, think differently, think about investors, help investors make profits, help investors succeed, serve investors, and achieve sincerity, sincerity, enthusiasm, perseverance and care, and exchange true feelings for true intentions. Build personality with integrity, establish a good cooperation relationship with investors, and move investors with your own true feelings.

[Case] Taiwan Unification Group was also introduced with "five hearts and true feelings". The group originally planned to take Wuhan as the investment focus of Central China. In order to change its original intention, the leaders of the district party committee and the district government in the suburbs of Nanchang City and the investment personnel spent nearly two years in uninterrupted emotional contact with the senior managers of the unified group.

Once during the Spring Festival, several of the main leaders of the district government braved the heavy snow and endured hunger and cold. They bumped on the road for more than 7 hours and went to Wuhan to pay New Year's greetings to the managers of the Unification Group.

When they arrived at the unified enterprise, the company was already off work, and they did their best to find Taiwanese businessmen to send New Year's greetings and greetings. Taiwanese businessmen were deeply moved by their true feelings and felt sorry for not to invest in Nanchang. Finally, they decided to invest in Nanchang Ying Science and Technology Park to set up a factory.

The investment attraction method of old project extending and expanding

We attach great importance to and give full play to the cluster radiation link effect of "doing a good job to bring a piece" to attract investment, provide sincere, sincere and timely service to the settled investment projects, solve problems, and promote their success.

Establish the real image of "many opportunities and high success rate" and launch the entrepreneurial brand of "low cost, fast return, high efficiency and good reputation".

Comprehensively and timely understand and master the global development strategic planning and strategy of settled investment enterprises, take the initiative to create conditions to attract with advantages, promote the extension, expansion and improvement of their new projects, new products and new technologies in the local area, and accelerate the industrial chainization and baseization of investment projects.

[Case] Successive municipal party committees and municipal governments of Xinyu City attach great importance to cooperation with Shanghai Huayuan Group Company, and have formed working groups to go to Shanghai to negotiate with Huayuan Group many times.

After the investment of the group, the Xinyu Municipal Party Committee and the municipal government have made every way to provide efficient and high-quality services to help enterprises succeed. After the overall acquisition and reorganization of Xinyu Textile Company, the company decided to invest in the operation of the China Carpet Industrial Park project in Xinyu City and strive to become the largest production-scale enterprise in China.

Special focus on investment attraction method

It is necessary not only to hold an investment promotion meeting to establish an image and expand its influence, but also to combine the cultivation and expansion of pillar industries, core technologies and cultivation of advantages, clarify the main targets, and take the initiative to attract investment with specific projects and negotiation plans.

On the basis of mastering the investment psychology of investors, we should make full use of the conditions and advantages, carry forward the "fourty thousand" spirit of mountains and rivers, thousands of words, thousands of hardships and all kinds of ways, and the "four skins" spirit of hard-skinned, cheeky, grinding mouths, and running through heels, and highlight the "four skins that have settled in mainland China Large companies focus on attracting investment.

[Case] In order to form the industrial advantages of the air conditioning production base as soon as possible, Nanchang Economic and Technological Development Zone, on the basis of careful research and in-depth analysis, focuses on well-known domestic air conditioning manufacturing enterprises such as Greencol, Ke⻰, Oaks, etc., formulates feasible projects and negotiation plans, and organizes forces to carry out Business.

After learning that the negotiation of an investment project between Ningbo Samsung Oaks Group and ⻓Sha was temporarily interrupted due to "SARS", Ms. Lu, the deputy director of the district, immediately brought her own transportation and brought her own dry food. At the risk of the "SARS" epidemic, she led the squad to take the initiative to attack, six times between Nanchang and Ningbo.

Her sincerity deeply moved the decision-makers of Oaks Group, and finally pushed the project to settle in Nanchang Economic and Technological Development Zone. Green Cole, Ke⻰ and other air conditioning manufacturers also adopt key investment methods. Now the air conditioning production base of Nanchang Economic and Technological Development Zone has begun to take shape.

Base-based investment attraction law in key areas

According to the characteristics of capital flows, the characteristics of Hong Kong, Macao and Taiwan capital flows, as well as the characteristics of investment flows in Japan, South Korea, Europe, the United States and Canada, determine the key areas, key areas and major strategies to attract investment, take advantage of the influence of the heavyweight projects that have been settled, make use of influential agents, and use the stationed Small detachment resident investment attraction and other forms, implement base-based and ⻓ phased investment attraction in key areas.

[Case] Yingtan City has sent more than 20 small teams to Guangdong, Fujian, Zhejiang and other places to attract investment. A small team is stationed in an area, focusing on a kind of project, and keeping an eye on several merchants. These small teams have brought in batch after batch of merchants, and have actually introduced more than 50 projects, with an investment of more than 1 billion yuan.

Pairing gradient undertaking investment attraction method

On the basis of mutual benefit, by establishing friendly and cooperative relations with developed regions, establishing a benefit-sharing mechanism, accelerating the docking and interaction with industries in developed regions, and actively striving for industrial gradient transformation.

At present, the investment cost of developed coastal areas is generally more than 20% higher than that of Jiang⻄, and the development space is limited. Some projects are difficult to continue. Therefore, some projects need to find new ways out in order to seek greater development.

[Case] Ganzhou City is close to Guangdong. After the highway is opened, the journey to Shenzhen and Guangzhou is only more than three hours. Taking advantage of the unique location advantage, Ganzhou City took the initiative to pair up and cooperate with Shenzhen and Guangzhou. On the basis of mutual benefit and benefit sharing, it signed an industrial gradient transfer cooperation agreement, which laid a good foundation for the formation of a "front store and a back workshop" in the future, and the project settled in Ganzhou.

The Law on Investment Promotion by Taking a temporary post in the targeted local Gov.

Send personnel to selectively go to areas, development zones and industrial parks with a strong trend of industrial gradient transfer and a high effect of attracting foreign investment to learn about the investment information of local enterprises and grasp first-hand information. Under the conditions of tacit understanding, mutual benefit and industrial division of labor between the two sides, they should work together. Strive to realize the project gradient transfer as soon as possible.

[Case] The Nanchang Wahaha project was successfully introduced using this method. In order to introduce the Wahaha project, under the direct promotion of the provincial and municipal leaders, the leaders of Shanhu District sincerely negotiated investment matters with them. On the other hand, they learned about the internal situation of Wahaha enterprises through the leaders of the Donghu District Party Committee who were suspended in Xiacheng District, Hangzhou City, where Wahaha Group was located at that time.

Based on the first-hand information obtained at the first time, the leaders and investment personnel of Shanhu District formulated negotiation plans in a targeted manner and carried out their work in a targeted manner. After a period of sincere exchange and communication, the leaders of the headquarters of Wahaha Group finally agreed to visit Nanchang, and the sincere spirit of the provincial and urban leaders was finally moved. The group leaders finally decided to invest in Nanchang, which changed their decision not to invest in the provincial capital city.

The method of attracting investment by telling the stories of former successful investment attracting

Focus on the appearance of successful investors in the region, and strive to attract more merchants to invest locally.

Hire powerful and influential people at home and abroad as investment consultants and investment agents to implement effective investment.

Hire representatives of large companies and enterprises at home and abroad in China as investment consultants or investment agents to carry out effective investment.

Implement limited authorization for investment consultants and investment agents and entrust them to attract investment. The focus is on providing us with investors' investment project information, investment strategic planning and the main consideration conditions for the selection of investment areas in a timely manner, etc., involving economic contracts, land and other specific economic activities, in order to prevent business risks and other The insurance is not authorized. It is necessary to reasonably solve the normal investment activity expenses of investment consultants and investment agents.

[Case] At the promotion meeting held by Ji'an in Guangdong and Fujian, merchants who have successfully invested in the local area were invited to introduce Ji'an, which received unexpected good results. 78 projects were signed in the two promotion meetings, and the contract attracted 4.6 billion yuan.

Xinyu City hired 21 businessmen as investment consultants, and the effect is also very good. Among them, the most typical are Mr. Qiu and Mr. Li, two investment consultants. They voluntarily invested 400,000 yuan to hold investment promotion meetings for the city in Zhuhai and Macao, and successfully introduced five projects such as Bolder Park and Hong Kong Zhanhui.

The end

Summary of investment attraction cases

Justin Lee

Jiangsu "Kunshan Model"

Basic introduction: Jiangsu Kunshan Economic and Technological Development Zone has created a "Kunshan model" to create an investment environment. Kunshan is a county-level city. There are nearly 3,000 foreign-invested enterprises in the city, which has formed a pocket effect and a basin effect to attract investment.

Kunshan Economic and Technological Development Zone was founded in 1985 and was approved as a national development zone in 1992, with a jurisdictional area of 120 square kilometers. Among the major economic index assessment of 54 national development zones in the country, Kunshan Development Zone ranks first in the comprehensive evaluation.

At present, foreign investors have invested and established more than 1,000 enterprises in Kunshan Development Zone, with a total investment of more than 10 billion US dollars.

Main experience and practice:

[Main experience]: Dare to be the first in the world, build nests and attract phoenixes, characteristic carriers, honest services and prompt officing, etc.; Service concept: pro-business, safe business, rich business;

[Specific practice]: In order to create a good development environment for foreign-funded enterprises, Kunshan Municipal Government and Kunshan Development Zone Management Committee in the city And create 5 brands in the whole region: improve the supporting environment of the industry and create "electronic Kunshan"; optimize the service environment and create "efficient Kunshan"; build an ecological environment and create a "green Kunshan"; create a legal environment and create a "safe Kunshan"; improve the humanistic environment and create a "charming Kunshan".

It has become the world's laptop production base, with an annual output of more than 10 million units, accounting for 1/3 of the world, and all parts are equipped within 70 kilometers. In the future, we will focus on developing three industrial groups: electronic information, precision machinery, and citizen necessities. Five advantages: location advantage (between Shanghai and Suzhou), cost advantage (rich labor), industrial chain. Advantages (low business cost, new competitiveness), service advantages (government services), ecological environment advantages (the fourth-level investment environment in the future).

The successful experience of Suzhou Industrial Park

Basic overview：

In 2020, the park achieved a regional gross domestic product of 290.7 billion yuan, a public budget revenue of 37.73 billion yuan, a total import and export of 94.18 billion US dollars, and the actual use of foreign capital was 1.97 billion US dollars, a record high. It achieved five consecutive championships in the national economic development zone ranking, and in the national high-tech zone ranking. Jumping to the fourth place, it has a strong comparative advantage in open development, industrial ecology, innovative ecology and business environment.

In the process of promoting the implementation of innovation drive and cultivating new momentum for development, the park adheres to the introduction and cultivation, and has accumulated a large number of science and technology enterprises. Up to now, there are more than 1,800 high-tech enterprises, 512 gazelle and gazelle cultivation enterprises at all levels, and 50 listed enterprises at home and abroad, among which, science and technology innovation Board 12 houses.

Successful experience：

1. Strive to build a management system and operation mechanism adapted to the development of the market economy, separate the middle and low-level functions in the government functions, and be undertaken by non-governmental public institutions or intermediaries, so as to effectively reduce the management level.

2. Create a high-quality environment suitable for human habitat and entrepreneurship.

3. Accelerate the improvement of international capital aggregation and regional core competitiveness, mainly developing semiconductor, optoelectronics and mechatronics.

4. Actively build an efficient, transparent, fair and standardized service-oriented government, put forward the concept of "pro-business" and implement "one-stop" service. 5. Adhere to the harmonious development of economy and society, people and nature.

Negotiating with the government to obtain industrial lands

Justin D. Lee

Negotiating with the government to obtain industrial lands can be a complex process. Here are some steps you can follow to navigate the negotiation process:

1. Research and Preparation: Gather information about the available industrial lands, their locations, sizes, and suitability for your industry. Understand local zoning laws, regulations, and government policies related to land allocation. Assess your own needs in terms of land size, infrastructure requirements, and future expansion plans.

2. Build Relationships: Establish connections and relationships with relevant government officials, such as local authorities, economic development agencies, or land management departments. Attend public meetings, industry conferences, and networking events to engage with officials and demonstrate your interest in the local area.

3. Clearly Define Requirements: Clearly articulate your specific requirements for industrial lands. Prepare a detailed plan that outlines the purpose of the land, expected investment, job creation potential, and the positive impact your project can bring to the local economy.

4. Identify Potential Obstacles: Anticipate potential obstacles or challenges that may arise during the negotiation process. These could include competing interests for the same land, environmental concerns, infrastructure limitations, or legal issues. Develop strategies to address these challenges and find solutions that meet both your needs and government requirements.

5. Present a Compelling Proposal: Prepare a comprehensive proposal that showcases the benefits of your project. Highlight its potential for job creation, economic growth, and positive community impact. Emphasize your commitment to environmental sustainability and corporate social responsibility.

6. Negotiation Strategies: During negotiations, remain flexible while advocating for your interests. Be prepared to offer incentives, such as job training programs, infrastructure development, or partnerships with local businesses. Seek win-win solutions that align your goals with the government's objectives, such as regional economic growth or industrial development plans.

7. Legal and Financial Considerations: Ensure your negotiation strategy takes into account legal and financial aspects. Consult with legal professionals to review contracts, agreements, and compliance requirements. Prepare a comprehensive financial plan that covers land acquisition costs, construction expenses, ongoing operational costs, and potential incentives or tax benefits.

8. Patience and Persistence: Negotiating with the government may take time and involve multiple levels of approvals and bureaucratic processes. Be patient, persistent, and willing to engage in continued discussions and revisions to your proposal. Maintain open lines of communication with the government officials involved.

9. Seek Expert Assistance: If needed, engage the services of experienced consultants, lawyers, or real estate professionals with expertise in land negotiation processes. Their knowledge and connections can help streamline the negotiation process and increase the likelihood of a successful outcome.

Remember, negotiation is a collaborative process, and building trust and understanding with the government officials is vital to reaching a mutually beneficial agreement.

Industrial Estate Trends in 2023

Justin D. Lee

Industrial estates areas typically consist of numerous buildings or Infrastructures, with companies renting or buy space to conduct their business operations. Industrial estates play a significant role in the growth and development of an economy, as they provide employment opportunities, attract foreign investment and promote innovation. Let’s explore the emerging trends and changes likely to be experienced in industrial estates in 2023.

Increasing Sustainability

One of the emerging trends in industrial estates is the increasing emphasis on sustainability. With a growing awareness of environmental issues, companies are seeking to reduce their environmental footprint and are creating more sustainable workplaces. In 2023, it is expected that more industrial estates will adopt green technology to reduce greenhouse gas emissions and promote environmentally friendly practices. This can be seen through the implementation of solar panels, LED lighting, rainwater harvesting systems, and other energy-efficient technologies.

Intelligent Infrastructures

Another trend is that of intelligent manufacturing Infrastructures. As technology continues to advance, manufacturers are investing in digital innovations to streamline their production processes. In 2023, industrial estates will likely see an increase in the number of intelligent manufacturing Infrastructures,like smart warehousing. These Infrastructures connect all aspects of the production process, from supply chain management to production lines, to improve efficiency and reduce downtime. Intelligent manufacturing Infrastructures rely on technologies such as AI and the Internet of Things (IoT) to deliver real-time information that enables quick decision making, reduces errors, and increases productivity.

Flexible Working Spaces

As the nature of work continues to change, industrial estates are adopting flexible working arrangements. In 2023, it is expected that there will be an increase in demand for flexible working spaces, such as co-working spaces, shared offices, and renting model space. This trend is driven by the increasing number of freelancers, entrepreneurs, and startups seeking these types of working conditions. Industrial estates that offer shared spaces will have access to a broader range of tenants, which can create a more dynamic and adaptable ecosystem within the estate.

Shift to E-commerce Logistics

Finally, the shift to e-commerce is also seen as a significant trend in industrial estates. As more people are shopping online, more emphasis is being placed on efficient logistics and warehousing. In 2023, industrial estates will likely see an increasing number of logistics companies choosing to locate within them to take advantage of their proximity to manufacturing facilities, transport links, and consumer markets.

In conclusion, industrial estates in 2023 will experience several emerging trends that will shape the future of these areas. The increased emphasis on sustainability, intelligent manufacturing Infrastructures and flexible working spaces, and the shift to e-commerce logistics offer opportunities for industrial estate developers, tenants, and stakeholders. Understanding these emerging trends is essential to remain competitive within the industrial estate market in the future.

How to Locate the Sites of Industrial Park Projects

The site selection of industrial park projects needs to be considered from multiple perspectives and multiple dimensions. It not only involves the requirements on the economic strength of industrial park investors, the professional and technical background of operation team, project financing means and ability, but also involves the influence of many external factors such as the underlying logic of the industry, social environment, natural conditions, government support and market supply.

At the same time, it must be clearly recognized that the site selection of industrial park project is the first key decision for the success of the park, and whether the site selection is successful determines the future development potential of the project and even the life and death of the project. The operator of Gewu Evolution industry believes that the site selection and positioning of industrial park projects can be divided into three steps: the first step is to select urban agglomeration according to the economic strength of the city; The second step, according to the regional characteristics to establish the project site selection evaluation model; The third step, precise industrial positioning, a blueprint to the end.

The first step is to classify cities according to their economic strength and make pre-selection of urban agglomeration

1. First-tier cities in the mature stage, typical representative cities such as Beijing, Shanghai, Guangzhou and Shenzhen, have a GDP of more than 2 trillion yuan, with tertiary industries accounting for more than 60% of the total. This kind of city has developed into a large scale and strong economic strength, and the four places in Beijing, Shanghai, Guangzhou and Shenzhen have become the advantageous areas for industrial park site selection. However, at the same time, the supply of urban land is constantly shrinking, land has become a scarce resource, and the acquisition of project land is extremely difficult, and it is easy not to enter the city without sufficient grasp.

2. Fast growing new first-tier cities, typical representative cities: Chengdu, Hangzhou, Chongqing, Wuhan, Suzhou, Nanjing, Zhengzhou, Changsha, Qingdao, Ningbo, Dongguan, Wuxi, Xi 'an, etc., with a GDP scale of 1-2 trillion yuan, and the proportion of the three industries is 40%-60%. With the rapid economic development momentum of new first-tier cities and the new direction of national strategic development, these regions have become the first choice to undertake the industrial transfer of Beijing, Shanghai, Guangzhou and Shenzhen. In addition, due to the increasingly fierce recruitment war in the new first-tier cities, these cities have become potential cities for talent gathering in the future. If there is an opportunity, we must not miss it, even if the cost is a little higher.

3. Second-tier cities in the early stage of development, typical representative cities: Kunming, Dalian, Xiamen, Hefei, Foshan, Fuzhou, Wenzhou, Nanchang, Jinan, Shenyang and about 30 other cities, the GDP scale of 500 to 1 trillion yuan, the proportion of the three industries is less than 40%. The development of second-tier cities is relatively stable, so whether there are major national strategic opportunities, favorable preferential policies, and obvious regional advantages should be considered comprehensively when the city is judged.

4. Third, fourth and fifth tier cities in the embryonic stage, typical representative cities: Zhuhai, Zhenjiang, Haikou, Yangzhou, Linyi, Luoyang, Tangshan, Shantou, Langfang, Taizhou, Huzhou and other cities, the GDP scale is less than 500 billion, and the proportion of three industries is less than 40%. Due to restrictions on location, policies and other factors, the economic development of these areas is relatively slow. Therefore, it is necessary to be cautious when deciding whether to enter a city, and do not seek temporary cheap prices. The unique resource endowment when entering this kind of city is the key to the site selection of industrial park projects.

The second step is to establish a 3-12plus evaluation model for project site selection according to regional characteristics

Using the 3-12Plus pre-selected city evaluation model of Gewu Evolution Industry operating organization, the target city is screened and evaluated in the next step. The next step can be made to judge the target city from three big dimensions, which are: regional market accessibility, regional acceptability analysis of industrial park; Customer development feasibility, regional park development feasibility analysis; The threat of competitors and the challenges to new entrants in the regional parks. Each evaluation dimension can be evaluated from four small indicators. The weighted weight is not considered for the time being, and only the indicators are quantified for the reference of the final decision. See the table below:

The above only represent part of the views of the operating institutions of the evolution industry.

The third step is precise positioning of the industry, a blueprint to the end

Due to the lack of unified scientific planning and accurate positioning at the beginning of the development of most industrial parks, the phenomenon of headache and pain appeared in the process of the development of the park. The usual problems include: excessive industry types and disorderly layout in the industrial park; Industrial correlation degree is small, set but not gather; Serious homogeneity, excessive competition; One-sided pursuit of high-tech industries.

The precise positioning of the industry is an important foundation for the park to attract investment in the early stage, which is conducive to helping the industrial park get rid of the traditional extensive development mode. The understanding of industrial selection and the location of the park is the premise of positioning, and the sorting of the industrial chain and the trend research are the key to positioning. Therefore, industrial positioning can be fully considered and measured from three aspects, which are the situation of target city, industrial development status and industrial development trend.

1. See the table below for details of target cities

2. Industrial development status of target cities

Take integrated circuit as an example to understand the distribution of each link of the industrial chain, and determine the feasibility analysis of industrial positioning of industrial parks according to the regional industrial distribution.

3. Industrial development trends of target cities are shown in the table below

On this basis, we should follow seven principles in the actual site selection operation: strategy-oriented principle, planning-oriented principle, land saving principle, convenient transportation principle, relying on existing infrastructure principle, green ecological principle and talent gathering principle. The following factors should be taken into consideration when evaluating the specific entry of industrial park projects: Does the positioning of the project conform to the development vision of the local government? Is there local land available for development? Is there local pressure for tax increases? How urgent is the local industry upgrading and adjusting? Is there a desire to improve the city's image? Can the revenue of the local government support the development plan?

In summary, the site selection and industrial positioning of industrial park projects have a set of systematic methodology and tools. A good site selection strategy and accurate industrial positioning will lay a good foundation for the development of industrial park, and also the beginning of success.

Road to Industrial Real Estate Management: Transformation from heavy assets Investment to light assets management

Justin D. Lee

At present, Industry Real Estate sector is facing the transformation from heavy assets Investment to light assets managemen，which means Business Attracting will play a very important role in the future

However, many people do not look good to do business sttractinh.The reasons for their objection are simple: first, it is difficult to do investment promotion, and it is already very hard to do it yourself, so it is even more difficult to help others industrial parks; Second, if you have the strength to do a good job of Business Attracting, why don't you directly take the land to do the industrial park?

In these people's view, Business Attracting is a false proposition.

However, we must be clear on two points.

First, in the real estate industry, Many industrial parks do business Attracting themselves, but also find business attracting agents to cooperate. The business attracting agent has a profit room. At present, both the government and the industrial park have demand for Business Attracting agents.

Second, there is long-term demand for merchants.Even if the industrial park is saturated one day, it does not need to be built, but there will be demand for Business Attracting. Because the enterprise has a life span. Industries need to be to upgraded, the old to be eliminated, new industries to be introduced, which doomed Business Attracting work will not die out.

It can be said that there is a market for light assets management and it is a long-term stable market.

Of course, selling is not a simple job. Many industrial parks fail because they cannot complete the Business Attracting.

Since it is difficult to attract merchants, how can you earn the money?

Developers used to construct the and transformation to Business Attracting is not easy, there must be strong capability in this sector.

What is the capability of business attracting ?

If we analysis of the agent in this field, it will be found that a good agent has two advantages:

First, is the corporate resources.

Usually business attracting agents will claim to have hundreds of thousands potential industry resources, or even tens of millions of enterprise resources, of course, how much real information, we do not know.

Business attracting agents rely on data, and the more enterprise data, the faster the de-conversion.

Enterprise resources are very important for business attracting agents. This advantage relies on the accumulation of peacetime and the establishment of a reserve enterprise resource pool.

Second is the marketing capacity.

Industrial parks Business Attracting is difficult, and you may only recruit a few enterprises a year. If we are slow to do the park recruitment ourselves, we can stick to it and know that some things cannot be rushed. However,business attracting agents must bear the pressure from the developer, all developers are pursuing rapid to change, not allowed to slowly to do it.

This requires a strong marketing ability to accurately push the project to the target customers, reduce the cost of extension, improve the conversion rate, spend the least money, and achieve the greatest marketing effect.

If there is no rich enterprise resources, and no strong marketing ability, transformation tobusiness attracting is a very difficult thing.

business attracting agents need to pay attention to teamwork.

Many industrial parks have self-built business attracting promotion teams, usually the personnel are all-round talents., the need to develop their own customers, need to contact their own communication, need their own reception to negotiate, need themselves to do business services, and so on.

To be an agent, you must work as a team.

Excellent investment agent has a professional team, the team has planning, marketing promotion, copywriting, design, marketing, sales and other personnel, division of labor cooperation.

After receiving a new project, immediately set up a team, formulate a work plan, carry out market research, project positioning, product packaging, marketing and so on.

Transformation from the development of Industrial real estate to light assets management, the team should also transit, business attracting model should also be transformed.

Whether the transition to light assets management will succeed,In the end, it is a matter of people.

Don’t bury it yet: Retail is far from dead

Dan Rafter from RE Journal

Think of the commercial sectors hit hardest by COVID-19. What comes to mind? Office, hospitality and … retail, right?

Maybe. But commercial real estate professionals working the Minneapolis-St. Paul market say that the retail sector in the Twin Cities and beyond is firmly in rebound mode today. That’s because retailers have adjusted to the new shopping habits of consumers. They’re focusing today on in-store pickup, curbside pickup and increased delivery options.

These retailers are taking the omnichannel approach – focusing both on brick-and-mortar locations and their online presences – to succeed in an environment that still remains challenging.

And plenty of the retailers doing this are doing business today in the Twin Cities market.

Drew Johnson, senior vice president of development with Excelsior, Minnesota-based development firm Oppidan, said that retail real estate remains an important part of the company’s business. And, he says, he sees a bright future for this sector.

“By no means is retail dead,” Johnson said. “It is still an important part of our business.”

In the Twin Cities area, several retail types are in expansion mode, Johnson said. That includes car washes, fast-casual restaurants and daycare centers.

And the Twin Cities has an advantage over some markets: It isn’t plagued with much vacant junior box space, Johnson said. Retailers who have wanted to expand in the Minneapolis-St. Paul market are filling any junior box space they can find as an alternative to building new spaces. The reason? Construction costs are so high today.

As Johnson says, most well-located power centers have filled in any empty space that opened during or before the COVID-19 pandemic.

“Of the junior box groups that have left the market, names like Kmart, Sears and Shopco, most of that space has been back-filled,” Johnson said.

The exception? Larger spaces in malls. These spaces are more difficult to fill not only because malls themselves are often struggling, but because there are so many additional regulations about which retailers can fill these spaces.

Mixed-use developments that feature retail spaces are also performing well throughout the Twin Cities market. The key, though, is that the developers of these spaces must find sites that work for all the uses at them.

Developers who are building a multifamily tower with first-floor retail, for instance, need to make sure that they are building this development in an area where there is enough demand for both retail and apartment units.

“If something is a bona fide site that works for both the retailers and the apartments, you can make it work,” Johnson said. “It has to be a really good site. Pulling off these projects is a little bit harder than developing straight retail or straight apartment buildings. For the right site, for an experienced developer, mixed-use can certainly work.”

Johnson said that more mixed-use developments should pop up across the country, including in the Minneapolis-St. Paul market. Cities are expecting these types of developments, Johnson said. Minneapolis, for example, has a zoning ordinance that pushes for mixed-use projects.

“When the project has a strong anchor tenant and the rest of the space is built around that tenant, that is usually a good investment in the community,” Johnson said. “But when you don’t have tenants in place and a city wants you to build a lot of retail space into a multifamily project, and the space is not well-thought-out, that can lead to problems. Developers might be susceptible to overbuilding the amount of retail space.”

As in most cities, Minneapolis and St. Paul do face challenges when it comes to the retail sector. This is especially true in downtown Minneapolis, which is still recovering from the impact of COVID-19, a lack of workers in downtown offices and the protests following the murder of George Floyd.

The hope, though, is that downtown Minneapolis will rebound, if slowly at least steadily. Already, more people have returned to downtown offices for work. As that trend gains strength, activity should steadily return to downtown, helping the retailers and restaurants working in this market.

2021 Nanjing Industrial Park Market Survey Report (Internal Reference)

Industrial Real Estate Research

1. background

In 2021, the total GDP of Nanjing is 1635.532 billion yuan, ranking pthe tenth in the country, the second in the province. The industrial pulling effect is obvious.In terms of plate, Jiangning District and Jiangbei New Area continue to lead the way, both standing at 200 billion level.

The added value of the city's industries above designated size reached 354.396 billion yuan, an increase of 10% year on year. The development of advanced manufacturing industry was particularly rapid. The added value of high-tech manufacturing increased by 15.5% year on year, and the proportion of added value in the secondary industry in GDP also increased from 35.2% to 36.1%, which is the key driving force for the economic growth of Nanjing in 2021.

The GDP of Jiangning District in 2021 is 281.047 billion yuan, and that of the Jiangbei New District is 256.17 billion yuan. They are the only two strong economic districts in Nanjing with a total GDP exceeding 200 billion yuan. The economic strength is far ahead of other districts. The GDP of Lishui District in 2021 will be 100.095 billion yuan, breaking the 100 billion yuan mark and realizing a relatively large leap forward.

2. Land market

Total number of land (scientific research land) transactions in 2021 is 28; Total area of land traded:About 598,000 m2.according to Land bidding and auction transactions, the area of scientific research land in 2021 compared to 2020, decreased by about 76%.The three regions with the largest turnover were Yuhuatai District, Jiangbei District and Pukou District.

3. Research selection

It lasted for three months, the three departments cooperated to investigate 36 projects, covering 8 administrative districts in Nanjing. The sampling standards were public sales or leasing of scientific research offices and commercial projects that formed a competitive relationship.

4. Internal parameter conclusion

4.1 Price:

[Sales level] In the research samples of all districts in the city, the sales price of scientific research and office products in Jianye District is the highest, Jiangbei New District and the main city of Xuanwu and Qixia are in the second echelon, and Yuhuatai and Jiangning are the last. The average price of single-family products in each district is 3000-6000 yuan / m2 higher than that of flat products.

[Lease level] In the research samples of all districts in the city, the rental prices of scientific research offices in the main urban areas of Qinhuai and Gulou are leading, and the average rental price of Jianye and Basaltic plates is 2-3 yuan / m2 / day, and Jiangning District is the last.

4.2 Deactivation:

[Sales level] In the research samples of all districts in the city, Yuhuatai District ranked first in terms of sales volume of scientific research carrier and average sales of single project in 21 years due to the influence of multiple favorable factors such as clear industrial positioning, strong software industry foundation and strong policy support. Jiangning and Jiangbei New Area follow in terms of sales volume by virtue of their respective industrial advantages and cost-effective scientific research products. Basaltic, Jianye and other regions subject to pre-sale carrier is limited, ranked by.

[Lease level] Among the survey samples of various districts in the city, Yuhuatai District and Xuanwu District have sufficient carrier supply, relatively convenient location and moderate rental price. The total amount of scientific research carrier rental in 21 years and the average rental volume of single project are in the forefront. The Qinhuai District and Gulou District of the main city plate rely on the conditions of the old project, the construction of silicon alley and other conditions, the core location conditions of main city, and also maintain a high rental level.

4.3 Supply:

[Future supply] Based on a comprehensive analysis of the stock situation of the research project samples and the volume of the new scientific research land in 21 years, the supply level of scientific research office carrier (including sales and leasing) in Nanjing will be saturated in the future.Jiangbei New Area (including Pukou District) is affected by the new area policy support, the largest supply;Yuhuatai District relies on the large stock of software valley and the impact of new lots of research land, the late supply is sufficient.Qixia and Jiangning District existing projects still have a large number of inventory.In addition to the impact of regional commercial projects, it is expected that the future of Nanjing scientific research office market competition will be more intense.

Glimmers of hope in the U.S. office market

DAN RAFTER

Looking for signs of hope in the U.S. office market? Here’s one: The country’s office sector notched positive net absorption in the fourth quarter of 2021, the first time this has happened since the start of the COVID-19 pandemic.

1100 BROADWAY IN NASHVILLE, IS AN EXAMPLE OF THE NEW-CONSTRUCTION OFFICE PRODUCT AT THE CENTER OF THE SECTOR'S FLIGHT TO QUALITY. (PHOTO: HASTINGS ARCHITECTURE.)

That glimmer of hope comes courtesy of JLL’s Fourth Quarter U.S. Office Market Overview. According to JLL’s report, leasing velocity in the office sector increased by 9.2% in the fourth quarter of last year. That boosted 2021 office leasing volume 14.6% above 2020 levels.

This doesn’t mean that the U.S. office market is back to normal, though. Even with the positive absorption seen in the fourth quarter, leasing activity in the last three months of 2021 was still only at 71.3% of pre-pandemic levels.

The fourth quarter leasing numbers, though, are a positive sign. They come after six quarters of occupancy losses in the office sector totaling 152.9 million square feet of negative net absorption.

And in another sign of the office sector’s struggles, JLL reported that concessions for CBD Class-A space are still at significantly elevated levels. The fourth quarter report says that rents for this type of space are still 7% below pre-pandemic norms. JLL predicts that this figure will improve only modestly in the coming months.

When tenants are filling up new space, it’s often in newly constructed buildings. JLL pointed to a flight to quality in the office sector, as companies take advantage of concessions to move into office spaces that they might not have been able to afford before the pandemic hit.

According to JLL, net absorption since the onset of the pandemic surpassed 51 million square feet in newly built office space.

The impact of this can be seen in vacancy rates. JLL said that in the fourth quarter of last year, the vacancy rate in office product delivered before 2015 was 19.7%. In office product delivered after 2015, the vacancy rate stood at 18.9%.

In the Midwest, Nashville remained one of the stronger office markets. JLL said that office leasing activity here in 2021 was 73.1% of what the city saw in 2019. That might sound like a negative, but this actually ranks Nashville’s office sector as one of the better-performing ones during the pandemic. Consider that in Chicago, office leasing activity in 2021 was only 33.2% of what it was in 2019.

HOW MUCH DOES IT COST TO RENT A WAREHOUSE?

Prologis

COSTS VARY BY A WIDE MARGIN

Warehouses come in all shapes and sizes, and depending on the amount of space you need and the services you want to employ, costs vary by a wide margin.

The problem is, it isn’t always easy to calculate the monthly cost of leasing warehouse space before you sign on the dotted line. This is especially true with many landlords and brokers that describe their rates and fees using confusing acronyms instead of straightforward language.

This guide discloses what to expect concerning the costs associated with renting warehouse space.

Calculating how much your warehouse is going to cost every month typically involves three primary numbers: the amount of space you need (in square feet), the base rental rate (monthly or annually) and the estimated operating expenses (also called NNN or CAM—more on that below). Don’t forget—you will also be required to pay for electric and water use.

A triple net lease (NNN) is a structure where the tenant is responsible for paying all operating expenses tied to a property. The landlord, meanwhile, is not responsible for expenses incurred as a result of operating the business on the property.

Billing is typically a monthly or annual occurrence. Here is an example of how to calculate monthly rental rates for a warehouse in which you need to rent 5,000 square feet of storage space, taking into account the following rates:

Average base rental rate: $0.85 per square foot per month

Estimated operating expenses (NNN): $.25 per square foot per month

For this warehouse, the total asking lease rate is $1.10 per square foot per month. Therefore, the total monthly rent would be $5,500 (5,000 x $1.10).

WHAT YOU NEED TO KNOW ABOUT CALCULATING COSTS WHEN RENTING A WAREHOUSE

When comparing warehouse properties, it’s important to ask the landlord or broker the right questions to get an accurate estimate of the monthly rent. Be sure to ask:

Who is responsible for performing and paying for maintenance?

Who is responsible for performing and paying for repairs?

Who is responsible for replacing equipment attached to the warehouse, such as the HVAC unit?

Would I have to pay for a common area or for only the actual square footage of the space?

Would I be required to install signs?

Is the landlord willing to pay for any tenant-made improvements?

The answers to these questions are important to know early because you don’t want to discover you’re responsible for such expenses after signing the contract. Should something go wrong that you are responsible for repairing or replacing, your budget could be upended instantly.

VTS report: As pandemic drags on, time is not on the side of office leasing

DAN RAFTER DECEMBER 3, 2021

The COVID-19 pandemic has thrown the U.S. office market into disarray. This isn’t surprising considering the uncertainty still surrounding this commercial sector. After all, many companies still don’t know when they’ll bring more of their workers back to the office. And when companies do make this move, it’s uncertain how many will require their employees to work full time in the office and how many will instead opt for a hybrid approach, allowing their workers to complete their work both from home and in the office.

How China can learn from the foreign modern agricultural industrial park Development?

The construction of modern agricultural industrial park is an important decision made by the Party Central Committee and the State Council and an important starting point to promote the revitalization of rural industries in the new era. In 2017, the Ministry of Agriculture and Rural Affairs and the Minister of Finance jointly launched the establishment of the National Modern Agriculture Industrial Park. On April 30, 2020, the Ministry of Agriculture and Rural Affairs and the Department of Finance approved 31 modern agricultural industrial parks to be established as national modern agriculture industrial parks, and 8 provincial modern agriculture industry parks were incorporated into the management system for the establishment of national modern farming industrial parks.

To date,The Ministry of Agriculture and Rural Affairs and the Department of Finance have identified 20, 29 and 31 national modern agricultural industrial parks in three batches in 2018, 2019 and 2020.

Countries such as Germany, Holland, USA and Japan started early in agricultural modernization.，Its modern agricultural park construction is accompanied by the development of agricultural modernization, Up to now, a large number of modern agricultural parks have been built, which integrate the functions of agricultural science and technology extension, technology demonstration, eco-tourism and agricultural education, and realize the benign interaction between agricultural modernization and agricultural park development.

Analyzing and summing up the development model and experience of the above four countries' modern agricultural parks is of great significance to solve the problems in the development of Chinese modern agriculture parks.

German Eco-Agricultural Parks: Ecology and Industrialization

The development of ecological agriculture in Germany is unique in the European Union, and its modern agricultural park construction is also around ecological agriculture, on the basis of eco-agriculture to promote the industrialization of agricultural park.

At present, milk, pork, grain, vegetables, fruits and other major agricultural products basically achieved ecological development, modern agricultural park is also in these main agricultural products planted, processed on the basis of further industrialization and scale. During the construction of modern agriculture park, the theme of ecology and industrialization is always the theme.

Specifically,First of all, to adjust the agricultural industrial structure and agricultural trade policy with market orientation, for the construction of ecological agriculture, formed the resultant force of economic, ecological and social benefits.

Secondly, after the formation of modern production system of agricultural products, further promote the specialization, automation and standardization of production system, forming a set of characteristic ecological industrialization development chain.

Third, on the basis of the production chain, and then build a strong marketing system of agricultural products, to achieve planting, feeding, processing, circulation, trade and other links of the train,Pay attention to the integration of agriculture, industry and commerce development, marketing and market development as the basic impetus to promote the development of modern agricultural parks, especially the expansion of overseas markets.

Fourth, the construction of standardized agricultural technology system, try not to use chemical fertilizers, pesticides, and actively promote the use of organic fertilizers, enhance the added value of agricultural products.

In Brandenburg's Kasht Agricultural Park, an area of more than 3,000 hectares of agricultural park, only four employees, the whole process is automated production and processing, In the whole process to achieve the ecological, recycling, such as cattle manure and related waste can continue to use, the waste processing for power generation, in addition to their own use, but also the remaining electricity sold to the State Grid Corporation.

Dutch Protected Agricultural Parks: Intensive and Standardized

The Netherlands is a country with less arable land and agricultural population, but it has created 9% to 10% of the global agricultural output value, Its potato, egg, beer, cheese and tomato and other net exports of agricultural products occupy the world first, especially potatoes accounted for more than 60% of the world's agricultural market.

The reason why the Netherlands can make such great agricultural achievements is closely related to its world-class level of facility agriculture. Specifically,First of all, soilless cultivation technology developed.More than 90% of the protected agricultural parks in the Netherlands adopt soilless culture, and rock wool is widely used as the cultivation substrate. Rock wool can avoid water loss or leakage compared with ordinary soil. In addition, rock wool does not contain any nutrients, which is convenient for managers to adjust the nutrition formula in different growth cycles of crops to maximize the growth of crops with appropriate water and nutrients.

Secondly, the circulation irrigation technology is advanced.When rock wool is used as culture medium, excessive irrigation is generally needed to ensure the stability of nutrients in the medium. The backflow of nutrient solution in rock wool is generally kept at about 40%. If these nutrients are discharged into the natural environment, it will not only affect the ecological security, but also cause water and nutrient waste. In order to improve the utilization rate of water and nutrients, the Dutch facility agriculture park generally adopts closed irrigation system, the cultivation nutrient solution after disinfection recycling, its water and nutrient recycling rate reaches 90%.

Third, crop water supply precision.The Netherlands Protected Agriculture Park (FAP) has developed water supply management models suitable for different crops during their growth cycle. In theory, crops absorb water mainly to counteract evaporation, and the amount of water consumed by crops is usually proportional to the time of illumination. The Netherlands Facility Agriculture Park adopts a precise water supply control system to adjust water supply according to the growth cycle of crops. The water supply can be adjusted in time according to the solar radiation in one day, which can not only ensure the needs of crop growth, but also avoid the waste of water resources caused by excessive irrigation.

Fourth, the RainWater collection system is well developed.From the point of view of crop growth, Rain Water is the best water source for rock wool soilless culture because of its lower EC value and less mineral composition compared with ground water and surface water.

In order to make full use of the Rain Water, Rain water collection systems have been widely established in Dutch facility agricultural parks, where Water irrigation accounts for 50% of the water supply. At present, the Rain Water Injection System has been established in some flower agricultural parks. In rainy season, the surplus Rain water is injected into the ground and stored in a specific soil layer for extraction when needed. The application of this technology can not only save water resources, but also effectively neutralize groundwater and improve the quality of groundwater.

American Science and Technology Agriculture Park: Technology and Scale

The United States is the country with the highest degree of agricultural modernization in the world. After years of development, its agriculture has become a highly integrated industry, and it is worthy of the name of the first agricultural country in the word. The experience of the United States in developing high-tech and large-scale agricultural parks with its natural endowment and resources is worth learning.

The construction and development of science and technology agricultural parks in the United States is an important symbol of agricultural modernization. Specifically,First, adhere to the main family farm business model.The family farm system has always been the most important mode of agricultural production in the United States, and its agricultural parks are also managed through the system of family farms. On the basis of the family farm, the implementation of science and technology in the agricultural park and scale, so that an area of 180 hectares of agricultural park, only 2 people can produce, manage and operate.

Secondly, the industry in the agricultural park is highly integrated.The construction, operation and management of agricultural parks in the United States is a comprehensive system. It not only includes comprehensive knowledge related to meteorology, geography and biology, but also includes agricultural production, processing, circulation and financial services. It is a multi-disciplinary, multi-sector complex. Because of this, American agricultural parks are characterized by high technology content and high output, forming a comprehensive agricultural form of scale, industrialization, socialization and internationalization, and forming an integrated industrial chain of agriculture, industry and commerce.

Third, the agricultural park has a high degree of specialization and reasonable layout.The development of agricultural parks in the United States has little homogeneous competition, and its rich climatic conditions, Make the agricultural park from the industry for a more reasonable division of labor, in the production link also carried out specialized decomposition, depending on different industries to establish a specialized, characteristic agricultural park system.

For example, in the eastern region, the establishment of a large number of pasture, dairy science and technology parks; In the central and northern regions, scientific and technological agricultural parks have been established. In addition, there are corn comprehensive science and technology park in the Great Lakes region, and cotton comprehensive agricultural park in southern China. These parks in the industrial division of labor, to avoid homogeneous competition, while in the production links, such as production, processing, circulation, trade and other links also carried out a detailed division, effectively improve the overall efficiency of agricultural production.

Fourth, the agricultural park attaches great importance to science and technology support.The innovation ability of American agricultural science and technology is world class. The government attaches great importance to agricultural scientific and technological innovation and technology promotion. In 1996, Congress authorized the Department of Agriculture to establish the United States Agricultural Strategic Development Agency, which integrates agricultural research, technology development and agricultural education. Over the years, the government has invested a large amount of funds for agricultural technology development, innovation, research and extension work, and established a complete agricultural technology research and development system and extension system. In the Agriculture Act of 2014, the system of integrating agricultural technological innovation with agricultural parks was reconfirmed, providing financial support for technological innovation in agricultural parks with a budget of $2 billion.

In addition, many agricultural parks in the United States actively promote the Department of Agriculture's "low input sustainable agriculture development program," actively use renewable energy to replace fossil energy, reduce agricultural pollution, and actively develop organic agriculture. Through a series of national support, effectively enhance the science and technology of the agricultural park, improve the scientific and technological radiation ability of agricultural park.

Fifth, the agricultural park attaches importance to the function of agricultural education.Agricultural education in the United States has its own characteristics. Its dominant force is to focus on the cultivation of practical talents, emphasize the application of agricultural technology, and attach importance to cultivating students' practical ability.

For example, Cornell University, which is famous for its agricultural education, has established its own world-famous Cornell agricultural and food science and technology park. Through practical education, it can enhance the students' operational ability and play its role in the construction and management of agricultural park.

Japanese Leisure Agriculture Park: Experience and Demonstration

Japan has a large population and little land, and its agricultural development has always been a small peasant production mode, and the implementation of the differentiated and intensive agricultural development strategy. In this situation, Japan's leisure agriculture park has developed rapidly. Leisure agriculture park is mainly run by the government, with holiday farm as the main body.

Holiday farm, as a typical leisure agriculture park, integrates sightseeing, agricultural production and agricultural experience, and realizes the multi-function of agriculture. Most of the holiday farms in Japan are located in the fringe of urban and rural areas. They pay attention to the complementation of the rural and urban areas. They are managed according to the management mode of common parks. They integrate the agricultural production, agricultural consumption and agricultural tourism, and play the demonstration effect of comprehensive agriculture.

In recent years, Japan's agricultural parks pay attention to the development of its experience, leisure agriculture park specialization is also increasing, Through the advanced agricultural technology to create a large number of famous and special tourist parks, such as cherry orchard, cherry garden, etc., can not only let visitors appreciate the pleasure of agricultural farming in the viewing, but also allow visitors to get a pleasant mood in sightseeing. In Japan's prestigious Tomita Farm, Sapporo Sightseeing Farm and Acer Apple Park and other modern recreational agriculture parks, each year from the world to receive 3 million visitors.

Because most of Japanese agriculture is cultivated by part-time farmers, the management idea and management method of agricultural park also reflect theThe function of agricultural education and agricultural research, combining agricultural production, processing, training practice and leisure tourism，With production, practice, tourism and other functions, reflecting the multi-functional characteristics of agriculture.

4. Promoting the comprehensive and multifunctional development of agricultural parks

Modern agricultural park construction is not a single production function, on the basis of production functions, should also play its multiple functions, especially in the strengthening of technology demonstration and radiation based on technical extension, technical training and agricultural education.

In addition, we should also adapt to local conditions to play the role of tourism, entertainment, leisure and science popularization of agricultural parks, give full play to the multi-function of agriculture, enhance the added value of the park crops and processed products. In the process of planning the development of modern agricultural parks, all localities shall, according to the local natural endowments, resource conditions, geographical location and level of economic development, scientifically locate the parks, and define their functions and development directions. The multifunctional characteristics of agriculture and the needs of the public are brought into the park construction planning, so that the agricultural park can not only serve the development of the countryside and agriculture, but also meet the requirements of the people, so as to promote the sustainable development of agriculture park.

Industrial real estate made "great leap forward"

Industrial Property Observation

"Cloud Tianfu" big data industrial park renderings

In recent years, the industrial real estate industry has a development trend:Pursue project scale and expansion speed.Whether it is deep farming industry veterans, or new entrants are accelerating the expansion of their territory.

The number of projects developed by industrial property developers has shown explosive growth.The East Timor Group is a typical example. According to Liang Huanyu, vice president of the Group, the country has done more than 90 projects in 2020, aiming to achieve 700-1000 parks in the country.

1. Right now,Industrial real estate developers have a number of projects and expansion speed, has become the evaluation of the elements.In a veteran industrial real estate business brand activities day, an invited industry guests bluntly its expansion speed is too slow, the development of more than 20 years in the national layout of a dozen projects. In contrast, some of the new Bureau of industrial real estate business, in two or three years has been completed the layout of a dozen projects.

In the past, even if the industrial real estate developers only had one project,As long as the project operation is successful, it will be able to be praised by the industry and learn from.Now, to get peer praise, you have to see how many projects in the layout of the country, if you have a handful of projects, sorry, too conservative.

In a sense,The number of projects owned and the speed of expansion has become an indicator of the evaluation of industrial developers.Expansion speed has become a manifestation of industrial real estate business competitiveness.

2.About five or six years ago, the pace of expansion is not the main theme of the industrial real estate industry, we are more concerned about how to run a project. In our opinion, it is difficult to operate industrial parks well, and it is very difficult to cultivate a mature industrial park.Because it takes time for industries to grow.

At the same time, we agree that the successful industrial park pays attention to the weather, place and people, the successful experience of the park can not be copied, the replication of the industrial park is more difficult.

Therefore,In the past, industrial developers did not expand easily. Even expansion is very cautious,When you have a successful product, you start thinking about it. The expansion process is steady,Even some industrial real estate developers to reassure the government, to the government in the next few years to concentrate on only one project.Unlike some of the new entrants now, have not done a good job of the first project, has been considering how to off-site layout.

Focus on industrial real estate industry, focus on the development of industrial parks. The content here seeks to be practical.

However,Around 2015, industrial developers began to build parks.Take East Timor as an example. According to Liang Huanyu, from 2003 to 2016, It took 13 years for East Timor to build 100 parks, but from 2016 to 2019, a second 100 park was built in four years.

3.Why the industrial real estate industry into the rapid development stage? In fact, there are several opportunities,

First of all, real estate enterprises involved in the field of industrial real estate, to bring a great touch to the traditional industrial developers.

Around 2015, a large number of real estate enterprises began to expand industrial real estate business. Seen the big scene, deep pockets of real estate enterprises, do plans very bold, usually cast a net in the national layout of a number of projects.

For the intervention of housing prices, the traditional industry developers at first feel puzzled. Because they have been saying that industrial real estate is not good to do, very hard, low profits, and does not meet the pursuit of high turnover, profiteering housing prices. Of course, we soon understand that real estate enterprises do industrial real estate, the purpose is to hope that through industry gimmicks to get high-quality land resources.

In fact, the traditional industrial real estate developers look down on the real estate enterprises to do industrial property, that they must do well, the final exit will be embarrassed.

However,The intervention of housing prices and crazy layout, the traditional industrial real estate developers began to reflect on their past practice is too conservative.

For a long time, the field of industrial real estate has been ignored, and even until now many people in the real estate sector do not know what the industry is doing. In the face of entering the real estate sector, the vast majority of people choose to do residential real estate, commercial real estate and do not want to enter the field of industrial real estate.Lack of talent has been a serious problem facing the industrial real estate industry, which explains why the industry has been slow to develop.

It can be said that the real estate enterprises as "outsiders" involved in the field of industrial real estate, although not to bring technology and experience, but "revitalize" the industrial property market. When the whole industry is accelerating expansion, people start chasing each other

Secondly, the industrial real estate industry has developed for twenty or thirty years, has trained a large number of talents, for the industry to provide a rapid development of talent base.

In the field of industrial real estate, there are a group of people in the silent work, through continuous exploration and trial and error, accumulated experience, but also explore the nature of the business model.

When the whole industry broke out, the opportunity came, many people came out to start their own businesses.With the accumulated valuable experience and successful cases, they can immediately get on the right track, do not need to go wrong, detours, and to achieve rapid expansion.

Zhejiang Netpost is an example of a new entrant. The company was founded in 2016. In the first three years, the layout of 7 cities and 11 parks, and in the beginning of this year, the company signed five new parks. Huang Feng, its chairman, has been dealing with real estate. In 2013, he began to intervene in the development and operation of industrial parks by his former employer. He accumulated experience through hard work. Catch up with the outbreak of the industry, independent entrepreneurship. From the expansion rate and the number of projects, its performance far exceeded most of the previous industrial property developers.

Third, in recent years, some industrial real estate companies successfully listed, in order to grow, they accelerate the expansion, seeking more projects.

4.Of course,Fundamentally speaking, the development of industrial real estate industry can not do without industrial transformation and upgrading.We have always stressed that the industrial real estate industry opportunities come from the need for industrial transformation and upgrading. If the industry does not need to upgrade, there is no industrial real estate business. Therefore, industrial development is an important driving force for the development of industrial real estate industry.

In recent years, intelligent manufacturing and digitization have promoted industrial transformation and upgrading, increasing the demand for production, office and R & D, thus bringing explosive development of industrial real estate industry.

Three Breakthrough Points of Planning and Positioning of Industrial Park

Industrial real estate think tank

1.The regional industrial base is the starting point

The industrial base of a region is the comprehensive reflection of resource support, policy support and talent support in a period of time. In order to understand what kind of projects can be developed in this region in the future, so as to break the bureau of what may be the leading industry cluster in this area, this is the need for early in the industry positioning link in-depth thinking.

Once it is clear which industry link to introduce, what kind of industrial talents will be gathered in the future, what kinds of living groups and consumption levels will be formed in the region. Let's look at whether our region conforms to the logic of industrial spillover and industrial population introduction. Generally speaking, which direction the urban industry extends, the growth of the city will be in which direction. This is the development idea of "production-city integration."

2.Product innovation is the key to sustainable Support

Any innovation that breaks away from the actual industrial base will become "water without source." The innovation of industrial park products should be based on the industrial base and the trader team for re-innovation and strategic innovation. No bright spot industrial park will be reduced to an ordinary industrial real estate project, only creative grafting or create bright spots, in order to meet the government's approval. Business innovation can be carried out from the profit model of industrial park products, industry chain integration and operational services.

3.Industry Resources Combination makes room for future improvement

Industrial park industry positioning is not a question, but multiple choice. Because the industrial base is there, it is basically clear what cannot be done; Product innovation is also based on industry foundation and city development direction, can choose also pick out; And the back story can tell how much, all lies in the integration of industrial resources.

Industrial park planning is an all-directional, process-oriented and long-term development plan for industrial parks. It is an important indicator and road map to lead the sustainable development of the park in the future. Therefore, "Planning first,construction second" is the important principle of industrial park construction.

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Tourism season is approaching, cultural tourism real estate drainage strategy

Industrial real estate think tank

Summer is coming, many enterprises and institutions to give their employees travel travel benefits, at this time, all kinds of schools began to have holidays, some self-driving tours, outdoor travel and other industries of the crowd, in this time planning travel destinations and routes. These people from different industries form the annual traveling army. These huge traveling army will soon go to the famous cultural tourist attractions around the country. The climax of the traveling is coming. The huge tourism crowd provides the consumption foundation for the cultural tourism business and contributes to the huge consumption. In this period of tourism peak season, a lot of drainage effect stronger cultural tourism attractions and its supporting businesses, the use of services consumers can contribute to the year's major performance.

Culture and Tourism Market Size

In 2019, prior to the epidemic, data showed that 60.6 million domestic tourists visited, up 8.4 percent from a year earlier. In 2020, the number of domestic tourist arrivals was 287.9 million, down 30.2 million or 52.1% from the same period last year. With the continued stability of the epidemic situation, the increase of the number of vaccinated, the formation of mass immunization, tourism travel warming development has been the general trend. For cultural tourism business, the beginning of tourism peak, means the start of "robbing people war," In the face of this irreplaceable online experience travel consumption, and tourists are most willing to spend, cultural and tourism businesses are gearing up and ready to go.

Integration of business travel and culture

Domestic Tourist Arrivals and Growth Rate from 2015 to 2019

As for drainage, cultural tourism business has an advantage over the commercial sites represented by pure shopping centers. Cultural tourism businesses mostly have cultural tourist attractions that can be relied on to drain water, and then through commercial services to turn the attracted traffic into performance. There is a huge tourism consumer, the corresponding will also have a huge cultural tourism business, there is no competition between consumers, business will be competitive, In the final analysis, the main competitors of cultural tourism business come from cultural tourism counterparts, the success of drainage depends on the characteristics of attractions, popularity and supporting business services, the purpose of drainage is business tourism cultural integration development, one-stop to meet the needs of cultural and tourism consumers.

In competition, the traditional saying is that people have no self, people have my excellent, Bioma China Commercial Real Estate Consultants believe that, Cultural tourism business in the drainage, as attractions can not change what, but can change the business, can change format combination, commercial content, commercial operation to make a person without me, people have me excellent reasonable change, to achieve drainage.

Travel Commercial Drainage Advice

1. Precise FitManagement's market positioning.

Cultural tourism business, although with an obvious cultural tourism attribute, but still needs a correct and reasonable market positioning in line with cultural tourism consumer. Among the traveling army, the main force at present is the new generation group represented by the post-90s. There are many differences between post-90s and the previous generation in their tourism focus, tourism consumption, consumption hobby and consumption intention. In the positioning, we should take into account the unique, diversified and trend-oriented consumption characteristics of the post-90s and Z generation young groups, and give a scientific and reasonable positioning. In addition, the needs of cultural and tourism consumers are diverse, such as experiencing exotic food and beverage features, experiencing exotic leisure and health features, buying exotic souvenirs, local products, medical and health supplies, going to summer, Some cultural tourism business positioning is the whole format, some positioning focus on leisure experience, and some positioning emphasis on retail light luxury, For cultural and tourism business, suitable for their own positioning is successful, positioning success, cultural tourism business will have a successful basis for protection.

2. Featured business portfolio strategies.

After determining the positioning, the business will have a basic frameworkwork, backbone, around the backbone of investment placement, placement in line with consumer demand business forms interconnected combination, forming a popular linkage, A link link complementary to meet the needs of consumers one-stop, on the one hand to save consumers' time, and on the other hand to improve consumers' random consumption, consumers also like one-stop shopping needs to meet, rather than take the demand apart north and south everywhere.

3. Characteristic creation of merchandise.

The characteristic product is the key of drainage, can arouse the consumer's desire to buy, this is not only cultural travel business, any business can apply. The featured products are mainly as follows: delicious food and beverage, special local products with health care function, special massage, acupuncture and bone-setting health service, Characteristic regional attribute food, yak meat, homemade yogurt, black wolfberry, Tianshan snow lotus and other tangible and intangible goods, give consumers the most direct experience of the feeling, produce consumer desire. Color, smell and taste of the characteristic snacks, can instantly ignite consumers desire to taste, since the media era word of mouth to realize drainage.

4. Cover all kinds of publicity online and offline.

The popularity of cultural tourism directly affects the popularity, the more well-known cultural tourism business flow will be greater, In the tourism season on the eve of the promotion of visibility is essential, today's fierce competition is also afraid of the alley deep, propaganda films, endorsements, shaking sound, little red book, B station and other online advertising.

5. Internet celebrity, well-known travel blogger, game anchor cooperation.

Invite traffic internet celebrity, well-known travel blogger, to the project experience, personally visit the project more representative shops, And can record video, live broadcast, take pictures and so on, show to a large number of consumers to watch comments, cause Walter heat, in the consumer psychological impression, attract consumers to experience, wake up consumers desire to experience.

6. Fusion innovation.

Innovation is still the magic weapon of cultural tourism business, doing business with heart, exploring innovation is the most effective core play of cultural travel business. One-stop to meet the needs of consumers business travel culture, providing innovative service initiatives, spiritual material dual meet consumers.

Epilogue

In essence, cultural tourism business is still centered around cultural tourism consumers, creating a spiritual satisfaction, social attributes of the lifestyle. Characteristic social attributes are still the core of drainage, Bioma China Commercial Real Estate Consultants believes that with the rise of a new generation of Chinese cultural travel consumers represented by Generation Z, The format structure and positioning of cultural tourism business should also take into account the needs of the new generation of consumers. More and more research shows that Emerging cultural travel consumers expect travel destinations to be cultural, comfortable, social and unique, cultural travel business should pay attention to these, in order to attract the younger generation of consumers, to determine the basis for success.

Who is suitable to do business investment park work?

Industrial Real Estate Watch

Among all positions in the field of industrial real estate, the requirements of investment officers are the most extensive. As long as the project can bring customers, everyone can do investment personnel.

Although there are no restrictions on investment work, but investment work pressure, performance is not good, and not the average person can be competent for this job. Then, who is suitable to do the work of investment park?

One, well-connected, have certain connections

Networking is very important to the investment work, including expansion, negotiations, project landing and other links play a key role. Some people will find that their efforts to do business for a few months, not as fast as colleagues rely on contacts to bring customers.

Some park projects in the recruitment of investment personnel, will understand the candidate's family background and social relations, priority to admit a certain relationship.

If you have a background of contacts, working in the park investment is a good choice.

II. Having been in charge of an enterprise and having entrepreneurial experience

It is a complex process to do business investment in the park, and it is the process of serving enterprises, which requires business investment personnel to understand enterprises and industries.

A person who has been in charge of an enterprise or has entrepreneurial experience, has a deep understanding of the enterprise, knows how to locate an enterprise, and can provide professional consulting services for enterprise customers.

Therefore, this kind of people do business investment easy to seize the pain point of enterprises.

Zhongye Huigu · Huai'an Science and Technology Industry Park

III. Strong learning ability and adaptability

If you do not have two advantages in front of the investment personnel only through continuous learning enrichment, so that their faster growth. In the process of investment promotion work, accumulate contacts and project follow-up experience.

For most people, engaging in investment work is starting from scratch, No experience, no contacts, no resources, rely on the investment in the front line of work, increase their knowledge reserves, accumulate investment experience, improve market acuity.

Therefore, the talents with strong learning ability can persist in the job of investment promotion.

How the I-55 Corridor is shaping the new e-commerce supply chain

Ajlatrace

Rooftops. Population. Talent. These are just a few of the buzzwords you’ll hear developers and brokers mention when they talk about the I-55 corridor. And there’s a good reason for it.

Running from downtown Chicago southwest out towards Bolingbrook and then further south to Bloomington/Normal, Springfield and beyond, I-55 provides a combination of easy access to Chicago population density, the sprawling industrial rooftops of Will County, and everything in between. And you’ve also got Midway airport, the Bedford Park Rail Yard and the CenterPoint Intermodal Center all within reach.

It’s no wonder why I-55 has really become known as being one of the region’s main logistics and distribution corridors. Developers are building spec facilities at a feverish pace and yet tenants continue to line up to occupy these new Class A spaces along the route.

“In Chicago, the focus tends to be on O’Hare, and O’Hare is ground zero for where institutions want to place money and where people want to be,” says Nick Siegel, Chicago Region Partner with Bridge Development. “But I-55 has a lot of the same dynamics as O’Hare: a good, modern highway system, access to labor, access to the city of Chicago, and access to rooftops.”

“Frankly, [the I-55 corridor] is our most modern distribution submarket that can reach Chicagoland quickly,” Siegel adds. “It checks all the boxes of somewhere that you want to locate.”

And indeed, the I-55 corridor is witnessing somewhat of a “Field of Dreams” effect, if you will. If you build it, they will come. And they just keep coming.

Some of the companies with a big distribution and logistics presence along the corridor include RJW Logistics, Best Buy, Crate & Barrel, and of course, there was also Amazon’s $50 million purchase of the 119-acre former Old Chicago amusement park in Bolingbrook which the e-commerce giant plans to use as yet another major distribution center for the metro area.

And then there’s the upcoming Wayfair fulfillment center in Romeoville being developed by Duke Realty. The online furniture retailer will bolster its Chicago distribution via a 1.2 million square-foot facility spanning over an 81-acre site.

“I-55 is a very important piece of our strategy for Chicago,” says Susan Bergdoll, midwest regional leader and SVP of Leasing and Development for Duke Realty. “I have four projects under construction right now and three of them are in the I-55 submarket, so that’s how bullish we are on that market.”

Because it’s a mature, built-up submarket, there are additional layers of complexity when planning new developments. For instance, Duke has already completed at least one redevelopment along I-55 where the existing structure was demolished and a new one built in its place. And for deals like the Wayfair facility, it required patience and timing to piece together multiple properties in order to create the one large industrial site.

The nature of I-55’s reputation as a distribution and logistics corridor, combined with the increase in e-commerce shopping and even the supply chain disruptions for raw building materials equates to scarcity of industrial product in the corridor, meaning that landlords are finding themselves in an even more ideal situation in terms of leverage and negotiating power.

“Rents are going up as we speak. Typically, people were used to a 2-3% increase per year, but if you’re coming up on your lease now, you could be getting a 20-30% increase,” says Jeffrey Kapcheck, Executive Vice President with CBRE. “I’m in the process of representing different tenants with lease renewals and new leases, but the renewal part is the most glaring aspect of it because of the large increases that landlords are asking for, and getting for the most part.”

Until supply catches up with demand, the industrial landscape throughout the I-55 corridor will remain a landlord’s market. But the continued strain on the supply chain for building materials isn’t helping.

“We’re up to 92 million square feet [of industrial space] and the vacancy rate is down to 7%, so I think developers and landlords realize that with the scarcity of land, they’re taking advantage of the lack of product on the market,” Kapcheck adds. “And I mean, COVID didn’t help because construction is down 40% from last year.”

At the end of the day, it’s the shifting buying habits of consumers and the need for labor that is helping drive the industrial e-commerce boom in the Chicago area.

“It’s not that we’re buying more products, it’s that we want them quicker,” Kapcheck says. “I think everyone right now is reimagining and reinventing their supply chain. It’s usually a three-step process where you’ve got the larger building, the mid-sized building, and the smaller urban logistics or last mile building.”

Kapcheck elaborates, suggesting that the larger distribution centers, which can range from 1 million to 2 million square feet might be located out along the I-80 or I-57 corridors, while the mid-sized facilities that span 500,000 to one million square feet are more likely to be found along I-55. Then there’s also the smaller last-mile hubs of 100,000 to 500,000 square feet which will be the closest to the population center.

While there’s been a lot of emphasis put on and attention paid to e-commerce, there’s much more to the Chicago area’s industrial market when you zoom out of the I-55 corridor, Bridge’s Nick Siegel suggests. And in many ways, having a healthy blend is good for landlords, tenants, and the municipalities that rely on the good jobs and taxes that industrial facilities provide.

“If you step out of I-55 and look at the market in general, Amazon is leasing a lot of space, but they’re also not,” Siegel says. “The leases in our portfolio that we’ve done on our spec buildings are with large manufacturing companies. We’ve done two separate manufacturing consolidations; one in Wood Dale and one in Itasca.”

And the blank slate spec building is designed to be flexible for a reason, Siegel adds. We can’t predict how markets will evolve and which industries will be hot, but if you build a space that meets the demands of many different types of businesses, you’re going to be safer in the long run.

It’s trying to get the right mix of users, which not only further promotes economic development, but provides stability and insulation from any future economic downturns. After all, real estate is a cyclical market, and there’s always a need for some level of caution when looking at the big picture risk. But Chicago’s geography, infrastructure, talent and sheer size also help provide further insulation from fluctuating economic conditions.

“One thing that I think gets lost in the mix is that we’re the second largest industrial market in the country,” Siegel says. “So this is just a massive, massive market with so many factors at play and I think we’re insulated from a lot of that risk because we’re not so dependent on one user type. We’re a really diversified, mature market and I think that benefits us tremendously when it comes to leasing velocity and keeping supply and demand in check.”

Industrial on pace for record-setting sales? It could happen in 2021

Dan Rafter

While the COVID-19 pandemic has devastated commercial real estate sectors such as retail, office and hospitality, it has provided a boost to industrial, a segment of the industry that was already thriving before the pandemic hit.

And today as the pandemic continues to recede in the United States? The industrial market continues to boom.

That’s the takeaway from the June National Industrial Report released by CommercialEdge. According to the report, lease rates for industrial space across the country averaged $6.59 a square foot in May. That’s an increase of 4.4 percent when compared to the same month in 2020.

Not all cities are seeing the same amount of rent growth, though, with CommercialEdge reporting that the highest rent growth continued to be seen in coastal cities, with the Southern California markets of Inland Empire and Los Angeles ranking first and second in year-over-year rent growth.

The national industrial vacancy rate hit 5.7 percent in May. And in the Midwest, the Nashville, Tennessee, industrial market’s vacancy rate fell to 3.1 percent in May.

Another impressive number? As of May 31, $18.1 billion in transactions closed across the U.S. industrial markets that CommercialEdge tracks. The average sales price per square foot for industrial space was $103 in May. That’s 16.3 percent higher than in May of 2020.

CommercialEdge doesn’t expect the good times to end throughout the rest of this year, either. The company said that U.S. industrial sales could match or even beat the record $44.4 billion in transactions closed in 2020.

The numbers also show that sale-leaseback transactions have become increasingly popular in this sector. Such deals accounted for 7 percent of the total U.S. industrial sales closed last year and 9 percent of property trades made since the start of this year. Among the industrial transactions closed during the previous 17 months across the markets tracked by CommercialEdge, sale-leaseback deals amounted to $4.8 billion.

These deals have been valuable. CommercialEdge says that since the beginning of 2020, the price of a sale-leaseback deal has averaged $116 a square foot, significantly higher than the overall average of $93 a square foot of industrial space sold during that same time.

CommercialEdge found three markets that have already exceeded $1 billion in industrial deals closed since the start of 2021. That includes Chicago, which has seen $1.1 billion in industrial sales since the beginning of the year, behind only Los Angeles and Inland Empire.

CommercialEdge found, too, that there is plenty of industrial space now under construction. In May, 410 million square feet of industrial space was being built in the U.S. markets the company covers.

And Chicago ranks high here, with 20 million square feet of industrial space under construction at the close of May. This figure is behind only the 28 million square feet set to come online in the Dallas-Forth Worth metropolitan area.

Chicago’s white hot industrial market means all hands on deck for property managers

Ajlatrace

As commercial real estate’s wild ride continues well into the warmer summer months, industrial landlords and investors have found themselves in one of the best imaginable situations compared to other asset classes. With high demand for and investor interest in industrial space, it truly is a landlord’s market in 2021.

However, this doesn’t mean that industrial property management is a set it and forget it proposition. If anything, the white hot demand for industrial means that landlords have to be more involved than ever in their lease deals.

“I think in today’s environment, [industrial property management] has really shifted to being much more hands-on,” says Victoria Knudson, Partner & National Leader of Property Management for Stream Realty. “Tenants want to understand their lease, what is their responsibility versus your responsibility — there is a lot of a lot more communication as it relates to how things run and managing expenses.”

And not only has tenant management become more hands on, the number of phone calls with other layers and players in the industrial segment have also increased dramatically, Knudson adds

From inquiries about available space, discussions about the local workforce, and talks about budgets, industrial landlords have also had to become comfortable with wearing multiple hats and expand their breadth of knowledge when it comes to the many different aspects involved in a site selection process or deal negotiations.

But the biggest issues for industrial tenants, particularly in logistics, warehousing and light manufacturing, remain costs associated with fuel and access to labor, Knudson says. Real estate is more or less a fixed expense, but it’s finding that balance of tapping into the right workforce and also being located where it makes the most sense for fuel and transportation costs.

With there being so much demand for industrial space, industrial landlords haven’t had to have the painful conversations about concessions and deferral arrangements that office and retail property owners and managers have been faced with throughout the pandemic. Instead, it’s almost been the opposite, Knudson suggests.

“Our [industrial] occupancies across the country are in the mid-90s percentage wise, and I run our national platform for industrial property management,” Knudson says. “Industrial is the hottest commodity and it can’t be built fast enough to be filled … so there’s no concessions and no rent credits. Our accounts receivable does not exist; it’s zero.”

Leasing has also been very strong for Duke Realty, which is currently building a handful of new industrial developments across the Chicago area at the moment. Susan Bergdoll, Senior Vice President Leasing and Development for Duke Realty, is leading the charge in the Chicago area and greater midwest for the REIT.

“Our [Chicago area] portfolio is 17.2 million square feet and I have two vacant spaces right now,” Bergdoll says of the strong demand and limited availability for Class A industrial space in the Chicago region. And tenants paying top dollar will expect all the bells and whistles, such as efficient overhead LED lighting, modern HVAC systems, and plenty of trailer parking.

But there’s still much more on the way. Currently, Duke is working on four new industrial developments in the Chicago area, including two spec projects: a 300,000-square-foot development in Bellwood and a 370,000-square-foot facility in Woodridge. Both of these new facilities are anticipated to be completed by the new year.

And similar to other major property owners and managers, Bergdoll says that her team has not had to offer free rent or other concessions to tenants. “The industrial market is so strong right now that we aren’t faced with some of those painful conversations that office and retail landlords are faced with,” Bergdoll adds.

However, if it means keeping a tenant and a lease renewal, all options are on the table, Bergdoll suggests. In this intensely hot and competitive market, it’s truly survival of the fittest.

“You’ve got to know who you’re competing against,” Bergdoll says. “You could be competing against a building that’s been sitting vacant for 12 months and that guy might be a lot more willing to offer up some concessions.”

One of the biggest unknowns facing industrial real estate right now is just how long the hot market will go on for. Both Bergdoll and Knudson aren’t too worried, at least for the meantime. Nevertheless, the near future looks just as bright for industrial landlords and property managers.

“We’ve been on an upward trend with industrial for a long time coming and it just continues to grow and grow,” says Knudson. “I don’t have a crystal ball so I don’t know that it can sustain forever, so at some point things will give, but for the foreseeable future — I’d say the next 24 to 36 months — I don’t see a decline; the demand is just too great.”