New report says Hampton Roads industrial market may see surge in new construction
With limited large blocks of available space and warehouse/distribution vacancy already approaching pre-recession levels, the Hampton Roads industrial market may see an influx of new construction over the next 12 to 18 months as the Panama Canal expansion is completed and retail demand grows, according to research analysis from Jones Lang LaSalle (JLL).
TEU volumes, which measure the capacity of container ships and terminals, have historically served as an indicator for warehouse and distribution vacancies in the Hampton Roads market, home to the Port of Virginia.
Container vessels that have a TEU capacity of 9,178 are continuing to push the limits of the Port of Virginia, drafting 49 feet, 3 inches of the port’s 50-foot channels. With the expansion of the Panama Canal, Post-Panamax and New-Panamax class vessels will boost per-ship TEU capacity of the canal from 5,000 TEUs (Panamax class) to 12,000 TEUs. Some maritime observers believe this could mean an increase in cargo at East Coast ports, and new construction may be needed to manage the growth.
“The growth of cargo moving through Virginia Ports relative to the number of vessel calls is a direct representation of the size of the vessels increasing,” Erin Corrie, a senior associate in the Hampton Roads office of JLL said in a statement. Corrie previously served as the economic development manager for the Virginia Port Authority.
“This is happening even before the completion of the Panama Canal expansion because the vessels are transiting the Suez Canal bound for the very few marine cargo facilities capable of handling the increasing draft requirements,” said Corrie. “This increased cargo directly correlates with the demand for warehouse, distribution, and manufacturing space where the owners depend on maximizing their efficiencies through minimizing inland transportation costs.”
Cargo growth at the Port of Virginia was up 10 percent in its most recent fiscal year, which ended June 30.