Prologis Paper Notes Rapid Growth in Industrial Real Estate

Prologis, a leading logistics real estate company, has a new paper on how demand drivers behind the fast-growing logistics real estate industry are changing and their future implications.

Prologis' Head of Research, Chris Caton, notes that growth in the logistics real estate is outpacing growth in the economy overall, largely driven by consumption and the rise of e-commerce.

“Prologis has formulated a new framework to understand the changes and drivers of the logistics real estate industry. The framework involves analyzing the types of customers who lease the real estate, how they are using it and why,” he says. “Demand for the logistics real estate is above historical averages, including markets close to major ports in Southern California and Northern Europe, despite slowing trade growth.”

As noted in recent news, the trend of e-commerce is likely to continue, with global e-commerce sales forecasted to grow by more than 150% over the next five years.

Prologis, has also tannounced it completed 18 projects totaling more than 5.5 million square feet of build-to-suit space during the second half of 2016. The company also was awarded 21 build-to-suit development projects representing more than 6.5 million square feet during the same period.

For the full year 2016, the company completed 34 build-to-suit projects totaling more than 12.3 million square feet.
“We experienced robust build-to-suit activity this year,” said Michael Curless, chief investment officer, Prologis. “The square footage of our 2016 build-to-suit starts increased more than 15 percent over 2015. This was driven by the key locations of our land bank and our development expertise and long-term customer relationships. This year, nearly 75 percent of our build-to-suit wins were with existing customers.”

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