Climate Risk: Logistics & Industrial Global Outlook

RISK LOGISTICS& INDUSTRIAL CLIMATE

GLOBALOUTLOOK

UNIQUE CONSIDERATIONS FOR LOGISTICS & INDUSTRIAL

This report continues our analysis of eight key climate hazards 1 . However, it requires a different lens compared to offices and cities, due to the unique characteristics of L&I assets and locations.

L&I assets tend to be built on city fringes, with larger footprints, and closer to transportation infrastructure such as rail, roads, or ports. The interconnectedness of L&I with other transportation systems is critical — risk is not limited to just the building. See the comparison between the largest office (New York) and L&I (Chicago Metropolitan Area) markets in the U.S. Land and location:

New York OFFICE

Chicago Area L&I

Market size

417 msf

1,251 msf

Avg. building footprint Avg. building height

16,000 sf

105,000 sf

190ft

24ft

Long lease structures:

Buildings as batteries:

Diverse asset sub class:

Longer leases, and costly and complex fit-outs (such as automation, manufacturing, modern warehousing, or data centers) make L&I assets less resilient to disruption. An office can shut for a week when a risk occurs, with employees working remotely. That is usually not feasible in L&I assets, requiring greater focus on risk mitigation.

Large roofs and declining prices for battery technologies, make L&I assets attractive for distributed energy generation and storage. This adds resilience to the local utility grid, particularly in infill locations or urban areas, potentially underpinning or supplementing other forms of energy supply in a disaster.

L&I includes asset subclasses that may be impacted differently by climate risk. Cold storage and data centers will be particularly susceptible to increased heat stress. Ambient warehouses may be less well protected from flooding or storms.

WIND

FLOOD

PRECIPITATION

HAIL

As a result, managing risks will heavily depend on site-specific details, including asset subtypes.

HEAT

COLD

WILDFIRE

DROUGHT

Our underlying data and hazard scores were derived from Jupiter Intelligence’s Climate Score Global physical risk analysis software for each site. The hazard score is representative of the exposure risk for that location and does not take into consideration the specific building itself.

1 https://www.cushmanwakefield.com/en/insights/climate risk-global-cities-outlook

CLIMATE RISK: LOGISTICS & INDUSTRIAL GLOBAL OUTLOOK

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