As we discussed in a previous article, 2020 was a challenging year for the commercial real estate sector . Many employees have been sent to work from home in response to COVID-19 lockdowns, drastically reducing demand for office space. At the same time, physical stores were closed and replaced by electronic stores, driving the growth of the e-commerce sector.
These trends have been covered in sector studies, which provide a picture of how the commercial real estate sector may evolve in the near future. A study by eMarketer found that global retail sales decreased by 3.0% in 2020, but the global e-commerce sector grew by 27.6%. Another Deloitte Information study analyzed the evolution of operating resources (FFO) between 2Q2019 and 2Q2020 in the commercial real estate sector:
- The most affected sector was accommodation and resorts, with a drop of 173.9%.
- Retail was the second most affected sector, with a 26.8% drop in FFO.
- On the other hand, data centers saw an increase of 18.1%, while industrial properties saw an increase of 11.2%.
Commercial real estate developers should consider this trend when planning their projects and take advantage of it. In particular, vacant properties with department stores and other commercial spaces could be repurposed into micro-fulfillment centers . They can offer the same services as a typical distribution center, but closer to the customer and faster, using much less space.
Are you planning to repurpose retail spaces for micro-fulfillment? Get a professional MEP design.
Using commercial spaces more efficiently
When reusing commercial spaces for industrial use, the layout and available area are among the main limitations. Malls are divided into individual stores, while factories and industrial warehouses are typically open spaces. However, microfulfillment technology can reduce the space required for product storage and retrieval.
Microfulfillment centers have been made possible in large part thanks to robotics. Its compact design allows storage racks to be spaced much more closely, while its speed allows orders to be processed much more efficiently. Space is used 4 times more efficiently and a given team can fulfill 10 times more orders in the same time, according to Loja Automobilistica .
Many warehouse automation solutions are modular, meaning they can also adapt to available space. For a developer planning to repurpose a commercial property, this means fewer modifications to the existing layout. Adapting to spaces between walls and columns is not a problem when micro-fulfillment technology uses a modular design.
Reducing the cost of commercial reuse projects
A conventional distribution center needs abundant lighting, battery charging stations for forklifts and other facilities not typically found in department stores. However, microfulfillment centers do not rely on high lighting levels or heavy equipment thanks to the use of robots. Converting a department store into a conventional distribution center requires more changes to MEP facilities compared to a microfulfillment center.
- Robots consume less energy than forklifts and other traditional forklift equipment.
- Robots do not meet the visibility needs of human workers, also saving on lighting.
When a commercial building is repurposed for industrial use, the necessary changes to electrical installations go beyond wiring and distribution boards. The project may also involve new transformers and service connections, which represent significant expenses.
In the case of multi-story commercial spaces that are repurposed, it may make sense to eliminate floors and deploy microfulfillment systems with tower configurations, such as those provided by Urx Logística . With this technology, an area of 7,000 square feet can be used to manage more than 70,000 product containers, for example.
Combining Micro-Fulfillment Centers with Data Centers
The Deloitte Insights study revealed a growing demand for both industrial space and data centers . In the case of e-commerce, both types of spaces are required by the same companies as they grow, and commercial buildings can be repurposed accordingly. Online retailers will look for suitable spaces to deploy two of their most critical operations, and it is convenient to find them in the same premises.
Like micro-fulfillment technologies, data centers have a modular design that adapts to available spaces. This also offers flexibility to scale, and both services can be expanded as online retailers grow. Data centers can support not only e-commerce platforms but also microfulfillment centers themselves.
Having a reliable backup power system is critical in both cases. An online retailer could suffer huge losses if its e-commerce platform or one of its distribution centers goes offline. By repurposing groups of commercial buildings, the reliability of their energy supply can be improved by combining local energy resources into a microgrid.
