The industrial market continues to be the strongest segment of Virginia’s commercial market, with demand driven by robust traditional e-commerce as well as a shift in mainstream retailers to focus more on online sales.
The desire to move supply chains to the local market is also fueling demand in some local markets.
All this is in accordance Commercial Market Report Q2 2021 released by Virginia REALTORS® on Thursday.
The growth in e-commerce sales has become a key support for the industrial and warehouse market. Peak e-commerce sales accounted for nearly 16 percent of all retail sales in the second quarter of 2020. Although this share has declined, e-commerce still accounts for nearly 14 percent of all retail sales in the country.
As a result of high demand over the past year, construction of industrial premises has increased significantly. Over 10 million square feet of industrial space was under construction in Virginia in the second quarter of 2021. More than half of new industrial / warehouse construction is in the Hampton Roads market, where new Amazon properties are nearing completion.
COVID-19 and the economic downturn have led to major changes in the landscape of the industrial market. It is likely that the demand for industrial space will continue to be strong and the use of industrial space will change as the economy continues to open up.
“There is significant pent-up consumer demand in the market, which is a good sign of strong economic growth this year,” says Virginia REALTORS.® Chief Economist Lisa Stertevant, Ph.D. “At the same time, uncertainty remains about the types of long-term changes that COVID-19 will have on both the economy as a whole and the commercial real estate market.”
Virginia REALTORS® publishes quarterly reports on the commercial real estate market. These reports summarize trends in the office, retail and industrial markets in nine regions of the state and provide a forecast of future commercial market conditions.
Click here to view the full Q2 2021 Commercial Market Report.