Hyundai Plant, Port of Savannah Spur Demand for Industrial Activity in Savannah

by John Nelson

Savannah’s industrial real estate market is experiencing exceptional growth and now totals 113.7 million square feet, of which 98.2 million square feet (86 percent) is dedicated to bulk distribution (tracking facilities sized 100,000 square feet or larger). 

Year-to-date net absorption as of the end of the second quarter was 6.3 million square feet, which suggests another solid year ahead. Additionally, the vacancy rate remains low at 4.6 percent, a historically favorable level. 

David Sink, Colliers

The development community has been quick to respond to robust demand, delivering 19 buildings totaling nearly 10 million square feet in the second quarter, with the majority of it already leased. 

The market is primed for additional growth, with a significant amount of new construction underway. More than 16 million square feet is currently under construction, not including the Hyundai plant that will span 17 million square feet itself, along with related supplier facilities covering an additional 1.9 million square feet as of this writing. 

The $5.5 billion Hyundai plant will employ 8,100 people and be the company’s first dedicated electric vehicle (EV) mass-production plant. It is expected to begin full production in early 2025 and will produce over 300,000 vehicles per year. The effects of Hyundai on the local real estate market will continue to be felt for years as additional suppliers continue to search for space or sites on which to build. 

There are currently 31 buildings under construction, 29 of which are spec with an average size of 520,217 square feet, while two are build-to-suits averaging 510,000 square feet. The most active submarkets for spec construction are Effingham County with 5.1 million square feet, Bryan County with 4.8 million square feet and Bloomingdale/Pooler with 2.1 million square feet. (See graphic for spec buildings that will deliver in the second half of 2023). An additional 2.4 million square feet is under construction that will deliver in the first half of 2024.

The Savannah industrial market’s growth is directly related to the ongoing success of the Port of Savannah, which handles one out of every 8.8 loaded TEUs (20-foot equivalent units) in the United States. The port is home to the single-largest and fastest-
growing container terminal facility in North America, comprising two modern, deepwater terminals: Garden City Terminal and Ocean Terminal. 

Together, these facilities exemplify the Georgia Ports Authority’s standards of efficiency and productivity. In the 2022 fiscal year, the Port of Savannah was named the third-busiest container gateway in the United States at nearly 5.9 million TEUs. The Georgia Ports Authority has moved forward with an aggressive $4.5 billion plan to enhance terminal operations and expand container-handling capabilities over the next 12 years, all of which bodes well for the local industrial real estate market. 

— By David Sink, Principal, Colliers Savannah. This article was originally published in the October 2023 issue of Southeast Real Estate Business.

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