TMX Transform CEO and Co-Founder, Travis Erridge, shares his insights into how supply chain will impact business’ strategy and property decisions in 2025.
2025 is set to be one of generational transformation, with retailers and suppliers shifting from short-term tactical responses to medium- and long-term strategic changes. This shift will encompass all aspects of business, including supply chain management and property strategies.
The Shift to Long-Term Planning
In 2024, there was a notable increase in supply chain strategy development, network planning, and freight optimisation. Now, many companies are intertwining long-term property strategies to optimise their footprints for cost efficiency and workforce availability.
The key drivers for this strategic shift are:
- Stabilisation of Trading Conditions – Consumer buying patterns have evolved, requiring companies to rethink their operational models.
- Capital Costs and Inflation Management – The high cost of capital delayed investment in 2023 and 2024, but with inflation management and interest rates expected to decline in many regions, businesses are now shifting to a longer-term plan.
- Competitive Pressure – Retailers recognise that transformative change takes years, not months, and early movers will gain a strategic advantage.
The Role of Property in Supply Chain Transformation
Property decisions are becoming a critical element of supply chain strategy, with several key factors shaping the market in 2025:
- Shifting Market Dynamics – The demand for new warehouse space has declined, leading to rising vacancy rates globally. Subleasing activity is a lead indicator of end-of-lease vacancy, while 3PLs holding short-term space are expected to release it back to the market.
- Construction Costs and Material Availability – Inflationary pressures and material shortages are easing, reducing the cost of new developments and making construction more accessible for occupiers.
- Automation-Ready Facilities – As companies push for automation in distribution centres, property requirements are evolving. The need for buildings with sufficient power capacity, floor flatness, loading capabilities, structural integrity, and clear height is now a priority.
Key Trends in Supply Chain and Property for 2025
- Globalisation vs. Localisation
Geopolitical tensions will drive short-to medium-term planning challenges. Companies will increasingly rely on dynamic modelling to explore ‘what if’ scenarios and adjust their property strategies accordingly.
- Automate or Eliminate
The trend toward automation in Distribution Centres and warehouse operations will continue, driven by unified commerce and evolving consumer behaviour. Businesses will focus on right-sizing automation investments to balance ROI against capital expenditure.
- Digital Transformation
The integration of supply chain systems with broader business decision-making will be a top priority. AI, machine learning, and data analytics will enhance business intelligence, with a focus on improving data quality rather than automating flawed processes.
The Future of Property in Supply Chain Optimisation
In 2025, build-to-suit developments will rise as businesses shift from temporary overflow space to tailored, long-term supply chain solutions. The property market is stabilizing, with increased vacancies bringing flexibility after years of imbalance. With property costs making up 20-40% of a business case, interest rate hikes stalled expansions in 2023-2024. As financial conditions improve, companies will resume growth, driving a more dynamic market.
Key Takeaways for 2025
- A Strong Supply Chain Strategy is Essential – Businesses must integrate supply chain planning with property decisions to remain competitive.
- Specialised Expertise is in High Demand – The race for talent in supply chain and property strategy will intensify, with early movers gaining a significant advantage.
- Scenario Testing Will Drive Smarter Investments – Digital modelling and ‘what if’ analysis will be crucial in navigating the uncertainties of global supply chain and property trends.
2025 is poised to be a transformative year. Companies that embrace strategic change and invest in future-proofing their supply chains and property portfolios will thrive in the years ahead.
Supply Chain Consultancy and Property Services | TMX Transform