Site Selection In 2024: What Risks Define Business Investment Decisions?

Ongoing scarcities and geopolitical forces are among the factors that are impacting facility location decisions, according to a new study from the Site Selectors Guild.

Demand for development-ready industrial sites with sufficient infrastructure capacity is at an all-time high, according to a new study by the Site Selectors Guild and Development Counsellors International (DCI). This is due to an abundance of industrial investments spurred by the rise of megaprojects and federal policies. The study, “The State of Site Selection,” suggests that the scarcity of these sites, along with access to capital, is impacting project timelines and the viability of projects.

facility location decisions, The State of Site SelectionNow in its third edition, this primary research study identifies top trends impacting facility location decisions globally. The first edition of the report was released in March 2020, right before the COVID-19 shutdown. The second edition, released in September 2022, identified a surplus of office space and a shortage of industrial sites, in part due to the impacts of the pandemic.

“There has always been one certainty in our industry, and that is that our clients abhor risk,” said Larry Gigerich, board chair of the Site Selectors Guild and executive managing director at Ginovus. “As their advisors, it is imperative that we understand the impact of exogenous global trends and how they impact the decision-making process to mitigate as much risk as possible for our clients and the economic development organizations we partner with all in the context of the factors most important to our clients as they consider their deployment and optimization strategies.”

 

facility location decisions, The State of Site Selection

The State of Site Selection: Key Findings

Here are some key findings from the 2024 State of Site Selection report:

  • The State of Real Estate, Sites and Buildings: The demand for development-ready industrial sites with sufficient infrastructure capacity has never been higher due to an abundance of industrial investments spurred by the rise of megaprojects and federal policies. The scarcity of these sites, coupled with access to capital, is impacting project timelines and the viability of projects.
  • The State of Utilities and Infrastructure: The strain on electric grids in the U.S. has intensified due to a significant uptick in manufacturing investments for energy-intensive industries, such as data centers, electric vehicles and semiconductors. To meet energy demands for large industrial projects, the U.S. must increase electricity generation by around 50%, which doesn’t include demand from an electrified automobile fleet.

site selection

Innovation And Talent: Top Performing Cities

Continued movement to more affordable, lifestyle-centric cities is further diversifying the landscape for innovation-focused companies and investors, according to JLL. Read more…
  • The State of Natural, Manmade and Geopolitical Risk: The definition of risk has evolved to encompass manmade hazards (crime, terrorism and war), extreme weather and geopolitical upheaval. Guild members say that each of these risks impacts investment decisions or poses threats to already vulnerable electric grids, the supply chain, and the ability to recruit and retain talent.
  • The State of the Workforce: A critical shortage of construction and manufacturing workers could derail President Biden’s industrial agenda.  Immigration policies and insufficient worker training and retraining programs continue to compound workforce shortages. Amid layoffs, the “great resignation” and “quiet quitting”, there is a rebalancing of the white-collar workforce.   
  • The State of Economic Development and Placemaking: The intersection of economic development and community development is becoming more noticeable as communities grapple with housing and childcare shortages, factors increasingly weighted more heavily in location decisions.
Check out the latest surveys, research and economic forecasts regarding economic development, corporate relocation, corporate expansion, and site selection.

LEAVE A REPLY

Please enter your comment!
Please enter your name here