The overlooked asset class thriving in the age of just-in-case

Berlin Hyp Market Briefing: Let’s talk about light industrial!

The structural case for light industrial real estate begins with a simple observation about the global economy. "The era of just-in-time is definitively over," said Oliver Hecht, board member of Berlin Hyp, at a Berlin Hyp market briefing on the sector this week. The logic of sourcing globally and delivering precisely on demand has been broken by geopolitical disruption, energy shocks and the growing imperative to hold inventory closer to home. The consequence, in Hecht's view, makes light industrial "probably alongside residential the most interesting asset class for the next twelve months or more."

So what exactly is light industrial? Think of the workshop where a craftsman repairs motorcycles, the converted factory where a biotech startup runs its lab, the commercial courtyard where a digital agency shares a building with a food producer and a furniture maker. Units are typically small, often under 1,000 square metres. Tenants typically combine storage, light production, office and service functions under one roof. Buildings are frequently former industrial structures repurposed for the modern urban economy. In Germany, the Gewerbehof — a multi-tenant commercial courtyard — is the most distinctive expression of the format, and often the most dynamic.