THE 2017 OF
CE HOME EN
& SUPPLY CHAIN REPORT
ING CONFER UR
MANUFACTURING
ANUFACT M SC
Report: Retail demand leading to nearshoring by Matthew Clark mclark@scbiznews.com
A recent industrial market report suggests that the I-85 corridor is a “likely candidate for additional development.” According to the report, the Upstate has 14 million-square-feet of available industrial property that is vacant. (Photo/Provided)
Creativity becoming key with industrial spec by Matthew Clark mclark@scbiznews.com
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ecause of the rising costs of development, industrial speculation construction is getting more and more creative. According to a report from Colliers International, rental rate costs for industrial property continue to rise as asking rents increased by 3.7% since the third quarter. So, that means developers are trying different things in the market to attract tenants. “Speculative construction is not slowing down but developers are mitigating risk by building flexibility into their projects,” the report said. “Some developers wait for a tenant’s requirements, others build walls with knock-out panels to add dock doors, ventilation, windows or entrances to meet tenant specifications.” The vacancy rate for industrial property
in the Greenville-Spartanburg market was 7.1%, an increase of 30 basis points from the previous quarter. Market and flex industrial vacancy was 7.1% and 7.2%, respectively. Build-to-suit development remains strong in the Upstate and has been a significant driver of absorption in the market in 2016. According to Colliers, year-todate net absorption in the market is 6.3 million-square-feet as Dollar Tree, Rite Aid and Techtronic Industries moved into new distribution centers in Cherokee County, Spartanburg County and Anderson County, respectively. The net absorption in the market is more than 20% higher than the combined net absorption of 2014 and 2015, the report said. A combined 416,100-square-feet of industrial space is set to be occupied as Phillips Pet Food and Magna International move into build-to-suit developments at the Augusta Grove industrial park.
“Going forward, the region’s access to the port and position on the I-85 corridor makes it a likely candidate for additional development,” the report said. The Inland Port Greer finished a record month in September with 9,521 rail moves, besting the previous record set in August. “South Carolina ports play a vital role in the continued success of the companies investing in the Greenville-Spartanburg industrial market by expediting delivery of imports and exports, as well as reducing the cost on the transportation of goods,” the report said. Across the Upstate in 2016, Colliers reported approximately $765 million in capital industrial investment and there have been 13 projects totaling $442.7 million announced between July and September. Those 13 projects have generated 840 new jobs in the region. See INDUSTRIAL, Page 16
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recent survey by the Retail Industry Leaders Association found that American corporate executives believe “nearly half their global manufacturing capacity will be located in North America within the next five years.” A report by Ryder System Inc. said that manufacturing wages in China have increased 600% in the last 15 years and, coupled with infrastructure improvements and economic conditions in Mexico and a consumer demand to have products closer to point of purchase, the market is ripe for additional nearshoring. “With increasing responsiveness to customer demand, and reducing inventories at the forefront of retail supply chain trends, nearshoring offers clear advantages in conjunction with sourcing products from Asia and other developing countries,” said Tom Kretchmer, vice president and general manager for retail and consumer brands at Ryder System Inc., in a recent white paper. Additionally, Kretchmer said nearshoring can give manufacturers additional flexibility in terms of meeting various demand. He said nearshoring can allow manufacturers to postpone customization of a product, allowing them to react to the See NEARSHORING, Page 16
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