On November 18th, the NAIOP Greater Toronto Chapter and Panattoni Development Canada Inc. hosted a panel discussion on Industrial Properties and Trends that are Shaping the Future of Distribution Centres. LIDD Toronto’s Industrial Real Estate Advisory team attended this discussion, and here are some takeaways:
Michael Smele, Executive VP Eastern Canada, Panattoni Development Company Canada
Peter Millesse, Director, Industrial Advisory, CBRE Limited
Ernie Perfetto, Owner, Metro Concrete Works Inc.
Kurt Witteman, System Sales Manager, Wecon Systems
Brad Woodbine, Partner, Leeswood Construction
To demonstrate the evolution of distribution networks, Peter Millesse, Director at CBRE Limited, shared that clear heights 20 years ago were peaking at 28’ ft. Today, clear heights are now exceeding 38’ ft. – 40’ ft. “We could even see a 60’ clear becoming the norm in the future.” Multi storey facilities and needs for mezzanines will drive up the clear height as user expectations change.
LIDD Perspective: Clear height will continue to drive occupiers that are sensitive to height. While building heights may continue to rise, mid-height facilities (i.e. 24’ – 28’ clear) will remain in demand due to the following criteria:
- Smaller rentable areas: Landlords of high-bay space are hesitant to divide buildings into multi-tenant scenarios. Lower clear height facilities have a higher probability of being divided, and therefor, will be more accommodating to smaller rentable areas.
- Location: Mid-height buildings were developed in a geographically desirable area. This will not change, and therefor demand will continue due to highway access and transit.
- Manufacturing: Many manufacturers do not have sensitivity to height. Therefor a 38’ or 40’ height building will lead to wasted space and capital. Mid-height facilities will remain in demand for manufacturers.
Column bay spacing:
“Years ago 36’ ft. and 40’ ft. wide column bay spacing was common and now it is spread out to 55’ and even pushing 60’ ft. because users want the maximum amount of space between column bays to avoid column interference”, said Peter.
LIDD Perspective: Whether layouts are for existing buildings or new facilities, the spacing of building columns is always a concern during design. Certainly, the best set-up is for every column to land in the flue spaces between back-to-back runs of racking so that they will not interfere with pallet storage or mobile equipment. Design experts at LIDD argue that 40 feet remain the ideal spacing between columns to accommodate material handling equipment and optimize storage usage. Read more.
E-commerce and direct-to-consumer growth will continue to transform the fulfillment operations of retailers, manufacturers, plus their wholesalers and 3PLs. Requirement for door counts will continue to increase. 10-15 years ago the spec standard was, 1 door: 10,000 SF and now 1 door: 5,000 SF.
LIDD Perspective: Having enough doors is essential to an operation’s efficiency. Another important thing to keep in mind where the docks are concerned is sufficient depth. Shallow docks might afford you more storage space, but throughput capacity will dramatically suffer if the docks are so crowded that merchandise can’t circulate fast enough. Read more.
Ernie Perfetto, Owner of Metro Concrete Works Inc. explained the impact of concrete flooring and slab integrity: Damaged flooring can slow down the movement of goods in the warehouse and might also be hazardous for vehicles and the products being moved. It can increase downtime and reduce material handling productivity. The interaction between material handling equipment and racking is much more critical.
In Canada, most industrial occupiers still rely on spaced joints as its primary method of crack control. Even though joints can do a good job of controlling cracks, they are costly to make and maintain, and can be problematic. So, it would be rather ideal to try and eliminate these joints.
While the primary focus was on improving productivity, becoming energy efficient was also addressed as a growing concern. More companies are pursuing Leadership in Energy and Environmental Design (LEED) certification. According to Brad Woodbine from Leeswood Construction, “most buildings will be built under net zero carbon movement standards by 2050”.
Higher power requirements:
With an increased use of automation equipment, power requirements are increasing. Developers need to be creative in terms of offering more power while trying to reduce their energy consumption.
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