A recent study conducted by Kania Advisors has highlighted the crucial roles property location and geolocation attributes play in determining rental yields, prompting investors to re-evaluate their strategies.
The study delved into the impact of factors such as road traffic activity, freight volumes and proximity to major road networks on rental prices of logistics and industrial warehouses. Through a comprehensive analysis of over 100 assets across the US, Kania Advisors uncovered insights into how property location can reportedly revolutionise the logistics real estate sector.
By amalgamating property-level data with economic and demographic insights, Kania Advisors constructed a strategic model illuminating the intricate relationship between location and value.
Factors ranging from population catchment within driving distance to the flow of goods through nearby freight hubs emerged as significant causes creating impact. The analysis revealed a substantial 70% correlation between predicted and actual rents, underscoring the significance of geolocation factors in rental rate determination.
The study also revealed this wasn’t merely a data-driven exercise, it was an opportunity to unlock strategic advantages. By leveraging geolocation insights, investors gained invaluable clarity, enabling them to refine their strategies and mitigate risks proactively.
For instance, the revelation that road transport activity served as a leading indicator of rental growth provided investors with a strategic foresight advantage. Armed with this knowledge, investors could tailor their approaches, identifying prime locations and pre-emptively addressing emerging market dynamics.
The report by Kania Advisors emphasised: “Geolocation attributes are critical metrics for investors to incorporate in their decision process to gain detailed insights, monitor changing market conditions for their assets and to improve outcomes across business functions.”
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