Amazon Is Thriving During COVID, But What Does It Mean For Property?
COVID-19 might be causing global economic upheaval, but the world’s biggest tech firms are growing at their fastest ever rate.
Amazon for example saw sales soar 40% in the three months ending June 2020! Their size and dominance are only likely to become stronger as the pandemic pushes even more activity online.
How will it impact the property market?
The flood of online shoppers during the pandemic has strained the firm’s capacity. Amazon hired about 175,000 people in the previous quarter and is working to expand its warehouse space in anticipation of continued growth.
“We’ve run out of space,” Amazon CFO Brian Olsavsky.
Amazon are buying up large industrial warehouses all over the world, driving demand where there’s limited supply. The knock-on effect is a growing demand for industrial units of all sizes further down the chain. The scarcity in supply means rents are rising and industrial units have become a far more secure asset class, almost overnight!
“Rising demand & limited supply are causing
industrial units of all sizes to increase in value”
What else is driving demand for industrial units?
- The overall trend towards e-commerce over high-street retail means there is greater demand for stock-only warehouse space.
- More warehouse space will also be required to cope with the increase in distribution that comes with e-commerce over traditional retail.
- The UK Government’s changes to permitted development (PD) rights is putting additional pressure on developers to convert commercial units into residential.
- There’s also been growth in trade counter businesses e.g Tool Station, that also operate out of hybrid warehouses.
Time to act!
The rising value of sheds presents immediate opportunities for property developers, investors and agents. Potential profits are rising, so it’s time to start thinking about building industrial units, converting retail units, expanding industrial estates amongst many other strategies.
Make a start by learning more about the latest market trends – including more detail on industrial unit opportunities – by watching 4 top industry experts give a detailed webinar discussing ‘What Property Types Are Hot Right Now’:
Keep an eye out for more upcoming Nimbus webinars, blog posts and feature releases to ensure you stay ahead of the market.