Jun 16, 2022 08:00:00

Amazon changes strategy and invests 300 billion yen to acquire a large amount of real estate

From 2020 to 2022, it is reported that Amazon has invested at least $ 2.2 billion to purchase land and properties to be redeveloped, trebling the number of real estate it owns. increase.

Amazon (AMZN) Builds Property Empire for Warehouses Despite Slowing Sales Growth --Bloomberg

https://www.bloomberg.com/news/features/2022-06-13/amazon-builds-property-empire-for-warehouses-even-as-online-sales-growth-slows

According to the news site Bloomberg, Amazon has traditionally taken the form of 'a small number of developers buy land, build a warehouse, and lend it to Amazon', but in the last few years, Amazon has fulfilled itself. It has come to participate in the center (distribution center) development plan, and there are cases where it is competing for bids with vendors who have been partners so far when acquiring real estate.

It has been pointed out that there is a change from 'a strategy to build a warehouse in a large vacant lot in the suburbs' to 'a strategy to build a fulfillment center near the city'.

Amazon founder Jeff Bezos has long avoided big investments in real estate, but the changing needs of consumers to go to nearby Wal-Mart and other places if they don't deliver their products quickly make the strategy. It seems that it was decided to review it. Analyst John Blackledge said, 'If the item you buy arrives in five hours instead of two days, more people may buy it on Amazon.'

A major investment is 193 acres (780,000 square meters) of land in

Round Rock , central Texas, purchased in 2021. The land is highly regarded for its loose legal restrictions and can be used for any purpose, and can compete with rivals such as homebuilders, investment companies Blackstone, and Prologis, which has warehouses throughout the United States. I put it in.

Round Rock is part of the Texas metropolitan area of Austin, and Amazon believes that building a new fulfillment center will enable it to meet the needs of the Austin metropolitan area over the next few years. .. In fact, a local briefing for the construction of the new facility has already been completed and a development plan was scheduled to be submitted in the summer of 2022.

However, in May 2022, Amazon offered to the local government to postpone the fulfillment center development plan indefinitely. It seems that this is because the amount of online shopping handled has decreased along with the calmness of the pandemic, and the facilities are being left over. Other than round lock, construction plans and expansion plans are being postponed, and unnecessary land subleasing is being considered.

In the future, how Amazon will handle real estate and what to do with huge investment drops will be a meritorious person who has worked as Amazon's retail and logistics chief for more than 20 years and expanded the warehouse network from just a few places to the entire United States. Together with the successor to Dave Clark, who has been announced to change jobs to CEO of Logistics Tech Flexport, it is likely to be a future focus of Amazon's logistics strategy.