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Q3 2022 | Savannah Industrial Market Report

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Q3 2022 was quite active, with 6,149,611 SF of new space added to the market and 5,467,245 SF net absorption. YTD absorption has climbed to 11,264,574 SF which, as percentage of the markets total inventory, is 11.9% and will again rank Savannah as one of the top markets in the nation.

 

GPA Update

The Georgia Ports Authority (GPA) handled more than 1.5 million twenty-foot equivalent container units in the third quarter, an increase of 135,000 TEUs, or 9.6 percent over the same period last year. 

 “A high number of ad hoc vessel calls, the addition of three new Mediterranean services, and one new service to Asia contributed to the growth,” said GPA Executive Director Griff Lynch. “Additionally, our regular services have been arriving with significantly more cargo destined for Savannah.” 

 “While we have seen powerful growth across the third quarter, we are beginning to see signs of correction in the market,” Lynch said, noting that September container volumes were off by 7.6 percent compared to the same month last year, at 436,279 TEUs. A nearly three-day suspension of vessel service related to Hurricane Ian impacted September volumes at the Port of Savannah. 

GPA Board Chairman Joel Wooten said the Authority’s outlook for the rest of the calendar year is strong, but moderated compared to the rate of growth experienced over the past two years.

“We’re expecting a gradual easing in demand based on several factors, including a shift in the balance of consumer spending away from goods and back to services, and the impact of inflation on the economy,” Wooten said. “After having increased trade at a compound annual growth rate of 14 percent over the past two fiscal years, this change will represent a return to a more typical rate of growth for GPA.” 

An easing of demand should help U.S. ports address vessel backlogs brought on by unprecedented import volumes, Lynch said. The Port of Savannah expects to clear the need for vessels to wait at anchor by the end of November. Presently, approximately 204,600 containers are on the water headed for Savannah, down from a high of 262,500 in July.

Hyundai To Build Massive Electric Vehicle Plant

Hyundai Motor Group (HMG) will join state and local leaders on October 25th for a ground breaking on the largest economic development project Georgia has ever seen. Plans for a $5.54 billion electric vehicle (EV) assembly and battery plant on 3,000 acres, located just 30 minutes west of Savannah in Bryan County, were announced in May. The facility will start production in 2025, is expected to employ 8,100 people, and will be highly automated with the latest robotic technology. This is Hyundai’s first dedicated EV plant in the U.S., and it will have capacity for over 300,000 EVs a year. HMG includes the Hyundai, Kia and Genesis brands and has now become the second biggest seller of EVs in the U.S. Non-affiliated Hyundai Motor Group suppliers are expected to invest another $1 billion in the project.

 

Key Takeaways

  • The market has grown by 13,657,000 SF in the last 12 months
  • Vacancy is less than 1%
  • 19,658,972 SF is currently under construction of which 11,683,972 SF is spec (59%) and 6,975,000 SF is build-to-suit

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Q3 2022 | Savannah Industrial Market Report

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