By Indhira Desangles
Special for El Inmobiliario
It is no coincidence that I have been contacted through various channels by several clients from different industries expressing the need to locate available warehouses or buildings to store their merchandise and for manufacturing, given a constant shortage of space.
On the other hand, we see that there is a great opportunity and demand for space in the market for warehouse developers.
And this is where I would like to pause, because, certainly, the logistics market, since the appearance of the pandemic, has become one of the great facilitators of merchandise storage, manufacturing, imports and exports for ecommerce sales, among many others.
It is precisely this exponential growth experienced by the sector that is the reason why the immediate demand for suitable spaces for the storage of merchandise has been increasing in such a way that it generates a shortage of offers and a high occupancy rate and a high absorption rate.
So, is building storage spaces/warehouses a profitable business opportunity? I would say yes without fear of being wrong, and I base this on the fact that in the last two years, not only in the Dominican Republic but worldwide, this has become one of the preferred real estate trends for investors/developers looking for a highly profitable business.
In terms of profits or returns, the first thing to remember is that logistics real estate is a long-term business. Historically, the market offered cap rates between 10% and 12%, but currently, it offers slightly lower returns, around 7% to 8%, and the recovery is expected to continue and return to historical levels soon.
The good news is that there is a local availability of land suitable for the construction of these new developments that I would be happy to show you; however, it is important to be clear about the differences in terms of investment scale:
- New developers: investors who develop warehouses ranging from 300 square meters to 15,000 square meters; these in turn focus on entrepreneurs, emerging ecommerce, and SMEs in general.
- Large developers with a presence and history in the market: these have on their radar to build/invest in spaces larger than 15,000-100,000 square meters in spaces with special standards, and they also tend to respond to large industries with needs for significant merchandise storage spaces.
So, you're probably wondering, "But where can I build a commercial logistics and warehousing facility?"
Let me tell you that choosing the right site certainly presents a challenge for both parties involved. For the developer, you have to find strategic locations that guarantee greater efficiency in the client's commercial warehousing operations. When I analyze the areas I recommend and where I have available land for investment, I can tell you that I have a wide variety of plots of land for sale, both within and outside of industrial parks.
Some important figures are: land within industrial parks tends to be 38% more expensive than land outside of them, as it mainly offers industries tax benefits depending on the municipality/area of location, in addition to being ideal when the development period is short and even more so with a market.
So, I ask you, will you set up a large value chain, which translates into an increase in construction, hand in hand with commercial projects that contribute to the country's growth?.
Acropolis Corporate Center, Spatium, 8th Floor, Piantini, Santo Domingo. Dominican Republic, 10127.
+1(809) 669 3063
Desangles.Properties.
The author is:
Specialist in commercial and corporate properties, with more than 20 years of experience in the Dominican market.
