As cross-border e-commerce intensifies, will Miami-Dade see even more industrial demand?
The global gateway is increasingly luring logistics providers.
As more people and businesses are purchasing products from outside their borders, the booming industrial market in Miami-Dade County, known as the Americas gateway, is poised to continue benefitting from this growing segment of our new buying habits.
E-commerce is moving at a faster pace than expected in the race to become the world’s largest retail channel. JLL research finds e-commerce sales increased 12 percent from the fourth quarter of 2017 to that of 2018, beating brick-and-mortar sales growth, which increased 3 percent over the same period.
Of the activity, cross-border e-commerce represents a budding share. U.S. retailers sold more than $500 billion in goods to the world last year, estimates the U.S. Department of Commerce, and those retailers are also increasingly purchasing goods from abroad. See three trends we’re tracking to gauge the influence of cross-border e-commerce on Miami-Dade County, a global gateway.
Intensifying Latin American e-commerce is luring logistics providers.
As the United State’s fifth-largest cargo airport and principal US-LATAM shipping gateway, Miami International Airport (MIA) continues to attract logistics providers seeking to capitalize on Latin American trade.
Most recently, for example, MIA and the Brazilian Post Office, Correios, joined forces, having launched a partnership called Compra Fora (translates to ‘Buy Outside’) to accelerate the shipping of e-commerce purchases originating in Brazil. Deliveries from around the world will be shipped to MIA, stored at a warehouse facility located in Miami-Dade County’s Foreign Trade Zone (FTZ), pre-cleared by Correios and ferried to Brazil as domestic cargo — in under a week.
With e-commerce sales in Latin America and the Caribbean projected by eMarketer to reach $2 trillion by 2022, could this too hasten demand for industrial space locally?
A surge of cross-border sales is driving companies to expand their inventories, pushing more warehouses to capacity.
The steady upward trajectory of e-commerce is straining existing resources of even small- to medium-sized companies, forcing them to consider significant new investments in the region.
Recently, for example, one global logistics company nearly doubled in size in Miami to strengthen its focus on Latin America. Later this year, the company plans to launch a new service from Miami to Europe.
We’re watching how a growing presence of smaller players on the hunt for space will affect the market.
Cross-border e-commerce continues contributing to demand for industrial space situated near Miami’s free trade zones, with access to ports and air transit.
If there’s a lesson to be learned from e-commerce, it’s that access is everything. In addition to locating near Miami’s growing population centers, companies serving online shoppers are looking to establish a presence in greater Miami’s FTZs, eliminating the need for formal customs entry for foreign and domestic cargo as well as payment of duties and excise taxes.
The average rental rate for warehouse and distribution facilities have increased by 5.1 percent year-over-year to $10.25 per square foot (IG) in FTZ 281’s magnet sites. By the first quarter of 2019, the average rental rate in Miami-Dade County has increased more than 2 percent year-over-year, reaching $9.90 per square foot (IG).
Overall, with e-commerce increasing at a faster pace every year, and as it continues to drive industrial demand, those in the market for space should know there is room to grow in Miami-Dade County.
Learn more about Miami-Dade’s industrial trends.