How does electricity availability influence demand?

Electricity availability plays a major role in influencing demand for commercial land, especially in sectors that require reliable, high-capacity power for operations, development, and long-term tenancy. Properties with accessible and scalable electrical infrastructure are more attractive to developers, tenants, and investors, while those without may face delays, higher costs, or limited use potential.

Here’s a detailed explanation of how electricity availability affects demand for commercial land:

Development Readiness and Lower Startup Costs

• Pre-connected sites or those with nearby grid access reduce the need for costly and time-consuming utility extensions
  
• Developers prefer land that already has:
  
  • Transformers, utility poles, or underground conduit
    
  • Adequate electrical panel capacity
    
  • Permitted service from the utility provider
    
• These ready-to-go sites are more in demand because they offer faster permitting, earlier construction starts, and lower upfront infrastructure investment

Suitability for Power-Intensive Uses

• Certain commercial and industrial uses require three-phase or high-voltage power, including:
  
  • Warehousing with refrigeration
    
  • Data centers or server farms
    
  • Manufacturing or light industrial operations
    
  • Restaurants with electric cooking and HVAC needs
    
• Sites without sufficient electric capacity may limit tenant types, reducing market interest and resale potential

Tenant Attraction and Lease Value

• Tenants in office, retail, medical, and tech sectors demand:
  
  • Uninterrupted power for business continuity
    
  • Support for digital operations, HVAC systems, and lighting
    
  • Redundancy options for data and communications
    
• Higher power reliability leads to higher tenant satisfaction, lower vacancy, and better rental yields

Investment Appeal

• Institutional investors and REITs look for utility-ready properties to minimize risk
  
• Electricity availability directly affects:
  
  • Appraisal values
    
  • Capex forecasts
    
  • Exit strategy potential
    
• In emerging markets, parcels near substations or grid expansion projects are often seen as opportunity zones

Renewable Energy Integration

• Properties with robust electrical connections are better positioned to support:
  
  • Solar energy systems (on-site or rooftop)
    
  • Electric vehicle (EV) charging stations
    
  • Battery backup or microgrids
    
• This enhances appeal to sustainability-conscious tenants and buyers, and may qualify for green building certifications

Zoning and Regulatory Compliance

• Building codes often require a minimum electrical service level to qualify for commercial use permits
  
• In many municipalities, lack of adequate power can delay entitlements or restrict build-out options

Resale and Redevelopment Potential

• Future buyers look for upgradable infrastructure and proximity to:
  
  • Power substations
    
  • Smart grid or fiber-integrated networks
    
• Land with scalable electric capacity is more attractive for vertical expansion, adaptive reuse, or multi-tenant projects