The first quarter report by CBRE commercial real estate shows a long term trend for the Charleston region in high growth, starting with the construction of Volvo’s 2.3 million square foot manufacturing facility in the I-26 North submarket. The completion of the Volvo facility is expected to have a long term positive impact on the local economy, similar to that of BMW in the Greenville-Spartanburg industrial property market. The BMW facility has led to a demand for facilities for a highly active supplier network serving the BMW automaker.
The CBRE report predicts that growth of industrial parks for suppliers will continue in North Charleston-Ladson and I-26 corridors, and will mostly likely extend up to I-95. Construction of the new 300,000 square foot Daimler facility will also spur on investment in industrial property.
The growth in the Charleston port, with the imminent completion of the Panama Canal expansion project, makes the market desirable to a large number of distribution facilities looking to leverage direct access to the Port of Charleston, according to the CBRE quarterly report.
Construction strong in speculative developments
In addition to the construction of the automotive facilities, there is an additional 2.5 million square feet of space under construction, with 600,000 square feet of speculative space. Examples of this growth include:
- A 350,000 square foot facility by Childress Klein in the East Cooper submarket;
- A 350,000 square foot facility by WestRock in Hanahan;
- A 307,505 square foot shell building at Charleston Trade Center in Summerville.
These speculative developments are being watched closely by investors, especially foreign investment firms, who are looking at markets that can facilitate a stronger return than larger markets are currently yielding, and that provide a more stable investment than is offered globally.
The Charleston industrial market is attractive because of its strong demographics, low vacancy rates, asking rates, and increasing demand for manufacturing and distribution, according to the CBRE analysis. The Charleston region is considered one of the fastest-growing markets in the Southeast, with the growth of the port, and diverse manufacturing economy.
Source: CBRE First Quarter Report 2016, Charleston Industrial & Logistics Report
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