Please read the source and help me with the following question.

a. you are required to critique supply chains and regional competitiveness in
Africa and the regional location Factor 3

b. discuss Market dynamics of warehouses taking into
consideration the extract above

please note this is one question and not mul
Transcribed Image Text:SA REMAINS THE LARGEST, MOST SOPHISTICATED WAREHOUSING AND LOGISTICS MARKET ACROSS AFRICA Despite South Africa's weak economic climate outlook, demand remains stable for prime warehouse and logistics assets according to Knight Frank's Africa Logistics & Industrial Review H2 2021, with logistics facilities remaining the best performing commercial asset class in South Africa. Most occupier activity is confined to lease renewals and the consolidation of space, which is in turn, linked to a flight to quality. As a result, prime rents have remained stable at approximately USD$5.50 per square metre in Johannesburg, with this trend expected throughout 2021. Furthermore, anecdotal evidence indicates that demand for the prime warehousing sector is set to increase, underpinned by the vibrant e-commerce sector leading to the emergence a distinct two-tier market. Mixed rental performance Nairobi has remained the best warehousing and logistics market over the past year, recording the highest increase in rents between 2019 and 2021. Furthermore, evidence of the city's rising profile is reflected in the fact that it accounts for 50% of new space requirements. Across the 29 cities that Knight Frank monitors, a huge disparity in rent exists. At USD$10 per square metre and USD$9.80, Kinshasa and Dakar, for example, rank as some of the most expensive cities for prime warehousing in Africa, while Blantyre (USD$2.50 per square metre) is the cheapest. Despite this varying performance, anecdotal evidence suggests occupier activity in the sector is increasing across the continent. For example, new warehousing and logistics requirements were up Demand for urban locations driving up land values Across the continent, declining land supply, coupled with increased demand, is putting upward pressure on land prices, as owner occupiers compete with institutional investors for the best locations. Some cities' land values in established industrial nodes have grown between 2015 and 2021 such as Lagos (58%) and Nairobi (42% ). In addition, infrastructure developments such as the Chinese-built ring-road network Nairobi are prompting some occupiers to explore areas beyond traditional industrial hotspots. As a result, these areas in the periphery of some cities have seen industrial land values appreciate by as much as 35% in the Namanve (Uganda) region and 34% in Nairobi between 2015 and 2021. With access to urban industrial land expected to remain a key barrier in the sector, due to competing land uses, the value of prime industrial land in some cities appears set to continue rising for the foreseeable future. Investment appetite is high but stock is limited Appetite for industrial stock across Africa remains strong with investors attracted to the sector's strong income profile and positive market fundamentals such as rising urbanization levels, which is driving demand for urban logistics facilities. In addition, industrial assets, command attractive yields of approximately 12% on average compared to 9% for both retail and offices and 6% for residential. Overall, South Africa remains the largest and most sophisticated warehousing and logistics market across the continent, recording over 450 000 square metres of sales transactions in 2020 (RCA). For the rest of the continent, attracting global institutional capital has been a challenge due to the lack investible grade assets. However, this is changing with some developers looking to plug this gap. For instance, Kuwait-based Agility is developing over 1 million square metres of warehousing across Lagos, Abidjan, Maputo, and Accra, with plans to expand into other cities. In addition, regional developers such as South- African based Improvon and Africa Logistics Properties are set to deliver over 100 000 square metres of purpose-built warehousing space in Nairobi by 2024. Anecdotal evidence suggests that investor interest is steadily growing which has been demonstrated by key transactions over the past 5 years with a recent example being GRIT's landmark sale and leaseback deal with Orbit Africa. by 13% quarter-on-quarter (q/q) in Q2. These requirements have been underpinned by the agriculture, FMCG, and manufacturing sectors with overall requirements ranging between 5 000- 10 000 square feet size brackets. Demand is eclipsing supply in some markets The demand for the best warehouses continues to eclipse supply across most cities that Knight Frank monitors. In Nigeria, for example, the long-term scarcity of quality warehousing has led to most multinational blue-chip occupiers, operating out of purpose-built, owned facilities around Ikeja, Sagamu, and Agbarawe. This trend means that demand for purpose-built prime warehousing space remains robust. Knight Frank estimates that there is a total requirement of approximately 1 million square metres across the south-west region of Nigeria and within proximity to Lagos, underpinned by the agriculture, retail, and manufacturing sectors. For context, the total size of the purpose-built warehousing market in Nigeria currently stands at approximately 300 000 square metres. Already, developers such as Agility, are leveraging on this opportunity with plans underway to develop 270 000 square metres of warehousing space. Furthermore, Agbara Logistics Parks are set to develop an additional 35 000 square metres to their existing stock. In sharp contract to the dearth of stock in Nigeria, developers in Kenya have been responsive to growing demand, delivering over 170 000 square metres of speculative prime warehousing over the last 5 years, prior to which the prime market was confined to a limited number of developments. A further boost to supply is expected to materialise in the form of developers such as Improvon and Africa Logistics Properties' plans to deliver over 400 000 square metres of speculative space to the market by the end of 2024. Despite most stock being built speculatively, absorption rates remain high, driven by the agriculture and FMCG sectors. Unsurprisingly, average occupancy rates stand at 80%

Question

Please read the source and help me with the following question.

a. you are required to critique supply chains and regional competitiveness in
Africa and the regional location Factor 3

b. discuss Market dynamics of warehouses taking into
consideration the extract above

please note this is one question and not mul

Transcribed Image Text:SA REMAINS THE LARGEST, MOST SOPHISTICATED WAREHOUSING AND LOGISTICS MARKET ACROSS AFRICA Despite South Africa's weak economic climate outlook, demand remains stable for prime warehouse and logistics assets according to Knight Frank's Africa Logistics & Industrial Review H2 2021, with logistics facilities remaining the best performing commercial asset class in South Africa. Most occupier activity is confined to lease renewals and the consolidation of space, which is in turn, linked to a flight to quality. As a result, prime rents have remained stable at approximately USD$5.50 per square metre in Johannesburg, with this trend expected throughout 2021. Furthermore, anecdotal evidence indicates that demand for the prime warehousing sector is set to increase, underpinned by the vibrant e-commerce sector leading to the emergence a distinct two-tier market. Mixed rental performance Nairobi has remained the best warehousing and logistics market over the past year, recording the highest increase in rents between 2019 and 2021. Furthermore, evidence of the city's rising profile is reflected in the fact that it accounts for 50% of new space requirements. Across the 29 cities that Knight Frank monitors, a huge disparity in rent exists. At USD$10 per square metre and USD$9.80, Kinshasa and Dakar, for example, rank as some of the most expensive cities for prime warehousing in Africa, while Blantyre (USD$2.50 per square metre) is the cheapest. Despite this varying performance, anecdotal evidence suggests occupier activity in the sector is increasing across the continent. For example, new warehousing and logistics requirements were up Demand for urban locations driving up land values Across the continent, declining land supply, coupled with increased demand, is putting upward pressure on land prices, as owner occupiers compete with institutional investors for the best locations. Some cities' land values in established industrial nodes have grown between 2015 and 2021 such as Lagos (58%) and Nairobi (42% ). In addition, infrastructure developments such as the Chinese-built ring-road network Nairobi are prompting some occupiers to explore areas beyond traditional industrial hotspots. As a result, these areas in the periphery of some cities have seen industrial land values appreciate by as much as 35% in the Namanve (Uganda) region and 34% in Nairobi between 2015 and 2021. With access to urban industrial land expected to remain a key barrier in the sector, due to competing land uses, the value of prime industrial land in some cities appears set to continue rising for the foreseeable future. Investment appetite is high but stock is limited Appetite for industrial stock across Africa remains strong with investors attracted to the sector's strong income profile and positive market fundamentals such as rising urbanization levels, which is driving demand for urban logistics facilities. In addition, industrial assets, command attractive yields of approximately 12% on average compared to 9% for both retail and offices and 6% for residential. Overall, South Africa remains the largest and most sophisticated warehousing and logistics market across the continent, recording over 450 000 square metres of sales transactions in 2020 (RCA). For the rest of the continent, attracting global institutional capital has been a challenge due to the lack investible grade assets. However, this is changing with some developers looking to plug this gap. For instance, Kuwait-based Agility is developing over 1 million square metres of warehousing across Lagos, Abidjan, Maputo, and Accra, with plans to expand into other cities. In addition, regional developers such as South- African based Improvon and Africa Logistics Properties are set to deliver over 100 000 square metres of purpose-built warehousing space in Nairobi by 2024. Anecdotal evidence suggests that investor interest is steadily growing which has been demonstrated by key transactions over the past 5 years with a recent example being GRIT's landmark sale and leaseback deal with Orbit Africa. by 13% quarter-on-quarter (q/q) in Q2. These requirements have been underpinned by the agriculture, FMCG, and manufacturing sectors with overall requirements ranging between 5 000- 10 000 square feet size brackets. Demand is eclipsing supply in some markets The demand for the best warehouses continues to eclipse supply across most cities that Knight Frank monitors. In Nigeria, for example, the long-term scarcity of quality warehousing has led to most multinational blue-chip occupiers, operating out of purpose-built, owned facilities around Ikeja, Sagamu, and Agbarawe. This trend means that demand for purpose-built prime warehousing space remains robust. Knight Frank estimates that there is a total requirement of approximately 1 million square metres across the south-west region of Nigeria and within proximity to Lagos, underpinned by the agriculture, retail, and manufacturing sectors. For context, the total size of the purpose-built warehousing market in Nigeria currently stands at approximately 300 000 square metres. Already, developers such as Agility, are leveraging on this opportunity with plans underway to develop 270 000 square metres of warehousing space. Furthermore, Agbara Logistics Parks are set to develop an additional 35 000 square metres to their existing stock. In sharp contract to the dearth of stock in Nigeria, developers in Kenya have been responsive to growing demand, delivering over 170 000 square metres of speculative prime warehousing over the last 5 years, prior to which the prime market was confined to a limited number of developments. A further boost to supply is expected to materialise in the form of developers such as Improvon and Africa Logistics Properties' plans to deliver over 400 000 square metres of speculative space to the market by the end of 2024. Despite most stock being built speculatively, absorption rates remain high, driven by the agriculture and FMCG sectors. Unsurprisingly, average occupancy rates stand at 80%

Accepted Answer

Warehouse management is an essential component of modern supply chain management, and it is becoming…

Please read the source and help me with the following question. a. you are required to critique supply chains and regional competitiveness in Africa and the regional location Factor 3 b. discuss Market dynamics of warehouses taking into