New or used warehouses: which is the best investment?

A warehouse, whether owned or leased, is a tangible asset that represents a significant long-term investment. For this reason, understanding how it works offers important benefits; it allows you to protect your assets, optimize use, and maximize profitability. Furthermore, if it is kept in good condition and managed properly, it can increase its market value, which provides better opportunities and increases demand for space. Here we provide more information about new or used warehouses. Which is the best investment?

New warehouses

During 2023, new industrial properties continued to show low levels of commercialization, thus maintaining the dynamics observed in 2020. Fortunately, used warehouses continue to perform very well in the market, both for sale and for lease.

Even during the course of this year, direct construction costs have continued to rise. For this reason, a basic warehouse with a reinforced concrete floor, truck door, offices, simple kitchenette, metal truss roof, sheet metal roofing, and a height of 3 meters can have an average direct construction cost (not including the lot) of $2,600,000/m2. Meanwhile, a warehouse with a height of 6 meters can have average prices of $2,200,000.

Used warehouses

At the beginning of this year, the market for warehouses for rent in Medellín and warehouses for sale in Medellín showed a slight reduction in supply. However, they maintained profitability rates (calculated as the net management fee on the commercial value of the property) close to 0.49%, with properties offering differential rents as a result of different areas and locations, fluctuating between $12,400/m² and $23,500/m² for properties larger than 1,000 square meters.

Below, thanks to a study of warehouses carried out by La Lonja – the real estate association of Medellín and Antioquia – is a summary of rentals and sales by area, obtained from a sample of 56 properties in the first half of the year.

In a changing world, where some investments are unstable, used warehouses continue to be a very valuable tangible asset. For this reason, warehouses for rent in Medellín and warehouses for sale in Medellín or any other area of the Aburrá Valley represent security and stability, but above all, the potential for steady income.

We recommend that you stay up to date on the latest developments in the real estate world so that you can make the best decisions for your needs. Seek advice from transparent companies that are knowledgeable about market dynamics.