Industrial ValuationValuation of various types of industrial facilities include manufacturing, storage and distribution and flex space structures
Industrial Properties Categories
Industrial real Estate appraisal, typically involves properties where goods are made, stored and/or shipped. Industrial facilities are key nodes in the global trading system, by their nature are sited on industrial sites and adjacent to key transportation hubs – seaports, highway and rail junctions and airports and; tend to fall under three categories:
- Manufacturing
- Storage and distribution
- Flex space structures
Valuation of various types of industrial facilities include manufacturing, storage and distribution and flex space structures
Industrial property valuation requires consideration of industrial properties key characteristics such as site/location, site cover, eaves height, office space, adequacy of car and truck parking facilities, shape, Power, water, and heating and air conditioning and size.
Manufacturing
This includes the bulk of manufacturing industries from food and drink to chemical and mechanical engineering. There are a number of types of manufacturing facilities depending on the intensity of production, processing or assembly they support. Generally, there are three types of manufacturing facilities, heavy, medium and light manufacturing and assembly.
Generally speaking – depends on the facility type -manufacturing buildings ceiling height range between 4 to 12 Meters or sufficient height to accommodate heavy-duty, customized equipment and overhead cranes.
Storage Warehouses And Distribution Centers
Warehouses provide a variety of open and covered spaces. Open storage space consists of improved or unimproved areas not contained by a roofed structure designated for storing raw materials, components or finished products. Sizes of such type are varying. Warehouse properties sizes are moderate to large size with approximately up to 15% office space, and the balance of the structure having up to 15 Meters ceiling height.
Warehouses and distribution facilities features depending on the types of products they house. For example, some facilities feature refrigerated spaces to house perishable goods, wet tanks for storing bulk liquids and dry storage spaces for long-term storage under controlled humidity and temperature conditions.
Flex Space Structures
Flex properties are designed specifically to serve multiple purposes. Flex space structures are single-story buildings with 3-to-5-meter ceilings heigh. This type has a wide variation in office space utilization, ranging from retail and personal service to distribution, light industrial and occasional heavy industrial use.
There are three types of flex properties:
- Data centers which are large spaces and require special wiring and cooling system.
- Showroom properties which are a combination of offices, warehouses and showrooms.
- Research and development facilities contain office, storage and processing spaces. Rents higher than industrial to justify specialization
Industrial / Warehouse Demand
Demand for industrial/warehouse properties varies by type of property and how it is being utilized in either the production, distribution, or storage processes.
These demand factors are affected by domestic and global forces that affect the nature and scope of import and export activities. In addition, changes in distribution modes, replenishment, and supply chain management have had a significant impact on the location, design and linkages requirements of various users of industrial properties. Changes in production and assembly models can also have significant impact on demand for manufacturing facilities. Finally, given the cyclical nature of the industry, demand is significantly affected by economic conditions that affect the demand for goods. On the supply side, the production function for industrial facilities is more elastic due to the nature of design and construction requirements.