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Will We See Increased Demand for Cold Space


D Magazine in Dallas has an excellent article, CRE Briefs: Demand for DFW Industrial Cold Storage Space On The Rise, on the increased demand for refrigerated warehouse space around the Dallas Ft. Worth area in response to the Coronravirus.

The COVID-19 pandemic is creating massive disruption in the food industry, according to a new CBRE report. As many consumers shelter in place, online grocery sales have increased dramatically, resulting in increased demand for industrial cold space in the United States.

“Until recently, consumers were not ordering a lot of perishables online, but that will likely change in a post-COVID-19 environment,” said Matthew Walaszek, associate director of Industrial and Logistics Research for CBRE. “Now, we are seeing consumers trends toward buying foods online, such as frozen meats and poultry. To meet this new demand, we will need more temperature-controlled space.”

The article offered a number of points from the report as to why, CBRE sees an increased demand for cold space. Below are 3 which really stand out to me. They are also all related, as I think we will see an increase move towards residential grocery delivery. Overall the increase in consumer comfort with this method of grocery sales is going to lead to a change in the need for cold storage and warehouse space.

  • E-commerce grocery will become more widely adopted as consumer comfort grows with the practice. This will trigger the aforementioned heightened demand for cold storage capacity.
  • Public refrigerated warehouse companies will likely consolidate to gain more control of the cold storage footprint.
  • Since local grocery stores typically fulfill e-commerce, retail footprints will include more storage and fulfillment space, including a greater need for infill temperature-controlled facilities in proximity to consumers.

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