Economic uncertainty triggers demand for warehouse space

“For real estate, where there is high demand in one area, people will be forced to do some conversion here and there, real estate is an inelastic commodity. It is not something you can just increase within a short period; you cannot really increase when there is high demand .

“Definitely where there is high demand of any item, their price must increase but the rate of the increase might not be too pronounced but it must definitely increase. There are two major forms of increase in real estate. The increase can be by the number of years you pay for the rent per square metre, because if you are looking for a year and somebody is ready to pay for three years, invariably that is an increase, because if you have the money now, you will know what to do with it. “From the economic point of view that is an increase for the person receiving it”, he added.

On his part, the Chairman, Faculty of Estate Agency and Marketing, NIESV, Mr. Sam Eboigbe said the present increase in demand for warehouse is expected to rise as demand for retail outlets suffer some setback, as home delivery service is becoming an emerging lifestyle and a norm.

Eboigbe said , it should be understood that investors have even before the emergence of COVID- 19 pandemic in the bid to respond to the low demand for warehousing spaces became flexible in reviewing the terms and conditions for such spaces including

reduction in rates and tenure to attract offers. According to him, meeting client and customers’ expectation are characteristic of online express delivery services involving forwarding products from warehouses to endusers.“Smart investors in industrial properties are taking advantage of this scenario to remodel warehouse space to midsized sections to curtail the voids that have bedeviled that sector due to lull in economic activities.

“Most stakeholders have said that current border closure and global economic challenges could still negatively impact the commercial, industrial and retail sectors and the tendency now is to take steps in embracing this emerging trends in meeting clients expectations, expected to permeate all sectors.

“This would continue to place demand for midsized warehousing and we shall continue to have conversions and remodelling of spaces of larger units of warehouses to incorporate and meet such trendy requests|”, he said.