The Charleston region’s industrial market is bucking the national cooling trend | A job

Even as the national industrial real estate market showed signs of cooling in late 2022, the Charleston region remained a bright spot, according to a new report.

Cushman & Wakefield found that the tri-county area was among a dozen nationwide where the industry vacancy rate remained below 2 percent. Record the amount of cargo moving through Port of Charleston has led to unprecedented warehouse growth, with nearly 16 million square feet of space opening or opening during 2022.

However, construction could not keep up with demand, and rival port city Savannah was the only other Southeast market to post a lower vacancy rate for the rest of the year.

The Charleston region was one of only four places — Phoenix, Miami and Southern California’s Inland Empire were the others — where annual rental rates rose 40 percent or more.

“Coastal and port/residential markets continue to be priced higher than the rest of the country,” the commercial real estate firm said in a report.

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Overall, the U.S. industrial market finished 2022 with its second-highest overall net absorption with businesses occupying 477.3 million square feet. That’s down from the record 561.4 million square feet recorded in 2021. However, as the year drew to a close, slowing demand and economic headwinds led to a 9.4 percent drop in net occupancy from the third quarter to the fourth quarter. New leases of industrial space in that period fell by 28.2 percent.

“However, this marked the ninth consecutive quarter in which absorption exceeded the 100 million square foot mark and indicates that demand for industrial space remains strong into the new year,” Cushman & Wakefield said.

In a separate report, San Francisco-based developer Prologis, the largest in the world logistics real estate developer, said it remains optimistic about demand for industrial warehouses despite the slowdown at the end of the year.

“The bottom line is that conditions remain healthy, and we see little in our results or proprietary metrics to indicate a significant slowdown,” Tim Arndtthe developer’s chief financial officer said during an earnings call on Jan. 18, according to The Wall Street Journal.

North Charleston Crane (copy)

The new container line service will bring cargo from Saudi Arabia to the Port of Charleston’s North Charleston Terminal. File/Staff

Middle Eastern connection

Another container ship service connecting the Port of Charleston with Islamic port of Jeddah in Saudi Arabia began this month, bringing cargo from the busy Middle Eastern seaport to North Charleston Terminal.

The Indamek 2 service, or IN2container lines are managed Hapag-Lloyd and CMA CGM. This will include stops at Port Qasim in Pakistan as well as ports in India. In addition to Charleston, the ships will make stops on the US East Coast in Savannah and Norfolk, Va.

Saudi Arabia’s Red Sea port “will gain access to leading trade gateways across the Indian subcontinent and North America,” the container lines said in a joint statement. The trade link is a key part of “Saudi Arabia’s ambition to position Jeddah as a major east-west hub and strengthen its global maritime connectivity,” they said.

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The first sailing on the new line left Jeddah on January 11 and is scheduled to be in Charleston on February 1. The service will use smaller vessels carrying between 4,600 and 7,000 20-foot containers.

The service is joining Indamek route used by larger vessels calling at Vando Welch Terminal in Mount Pleasant.

In the past year, Saudi ports have added nine shipping services in a bid to improve the country’s ranking among the global shipping and logistics industry. Jeddah Islamic accounts for about three-quarters of the country’s maritime trade and transshipment volume.

Boeing 787-9 Dreamliner - Turkish Airlines

The 787 Dreamliner is shown in Turkish Airlines livery. Provided by/Boeing Co.

Big deal with Boeing

The American Export-Import Bank is considering a $100 million loan to help Turkish Airlines buy 787 Dreamliner nozzles built on Boeing Co.North Charleston Assembly Plant.

Agency, which is often called Bank of Boeing because it lends to foreign airlines that want to buy the maker’s planes, it said in a regulatory filing that it will make a decision on the deal after the comment period ends on Feb. 6. The carrier plans to use the aircraft on passenger and cargo routes between Turkey and Africa, the Americas, Europe and Asia, according to the filing.

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Turkish Airlines — which has nine 787-9s on order — expressed frustration with slow deliveries of the wide-body plane, a result of supply chain constraints and a 15-month pause in deliveries when minor manufacturing defects were discovered. Boeing resumed deliveries in August, but they are not coming fast enough for Ahmet Bolatthe president of the airline, which has 16 Dash 9 Dreamliners in its fleet.

“I plan to open new routes, but I lack wide troops,” said Bolat Aviation Week. “If I can find them now, we could easily buy another 20 next-generation wide-body aircraft … ready to come in 2023.”

With the Dreamliner unavailable, Turkish Airlines was approached Airbus. The carrier bought six last year A350 wide fuselages made by a French aircraft manufacturer.

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Reach David Wren at 843-937-5550 or on Twitter at @David_Wren_

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