Logistics Real Estate Cycles to be less Volatile

Prologis, a global leader in logistics real estate, today released new research findings, “What’s next: Four forces shaping the logistics real estate cycle”.

Businesses moving goods across the globe are still digesting and trying to cope with the rapid changes in economies, supply chains and logistics real estate affected from the past three years. In
this report, Prologis Research updates our views on demand, supply and the long-term outlook for logistics real estate.

Prologis Research finds four forces shaping the logistics real estate cycle at a global scale:

• Future logistics real estate cycles will be less volatile because of the multiplier effect on demand (20%+ more logistics space needed for every unit of GDP vs. pre-pandemic) and structural discipline in supply.
• Service levels are fuelling demand again. Customer network expansion needs are rooted in offering the speed and choice demanded by the end consumer to compete for revenue.
• The future of supply chain is resilience to persistent disruption through higher inventory carry, diversification of sourcing and near-shoring. We are now past the pandemic bullwhip, but long-range planning is subject to economic headwinds.
• New building deliveries will contract by 35% or more in the U.S. and Europe in 2024, creating a window for positive demand to take market vacancies further below historic norms in late 2024 and 2025.

The research underscores Prologis Europe’s ability to support business growth and supply chain expansion by being where their customers need them to be — and leveraging access, healthy balance sheet and scale to support them at every step of their warehouse journey, be it built-to-suit developments, energy efficiency solutions or operational optimisations.

Read the full report here.