{"id":1004295410,"date":"2019-01-31T03:16:06","date_gmt":"2019-01-31T11:16:06","guid":{"rendered":"https:\/\/www.commercialsearch.com\/news\/?p=1004295410"},"modified":"2022-03-03T09:47:45","modified_gmt":"2022-03-03T17:47:45","slug":"prologis-reports-on-logistics-global-growth","status":"publish","type":"post","link":"https:\/\/www.commercialsearch.com\/news\/prologis-reports-on-logistics-global-growth\/","title":{"rendered":"Prologis Reports on Logistics’ Global Growth"},"content":{"rendered":"
\"Chris<\/a>

Chris Caton, Global Head of Research, Prologis<\/p><\/div>\n

Prologis’ Logistics Rent Index examined the global landscape of logistics real estate and revealed rents on a global scale rose 6 percent.<\/p>\n

\u201cRent growth globally in our industry\u2014logistics real estate\u2014has been incredibly strong and remains incredibly strong,\u201d <\/em>Chris Caton, Prologis\u2019 global head of research, told Commercial Property Executive<\/em>. \u201cThe U.S. is a market that has had critical growth over the last four or five years and that continued last year as well.\u201d <\/em>In fact, in the U.S., rent growth rose 8 percent, led by numerous factors driving the market forward, including a healthy demand for space.<\/p>\n

\u201cYou had had a really healthy economy so there\u2019s been a cyclical uptick,\u201d <\/em>Caton said. \u201cWe have a wide range of customers and some of them benefit from the economic cycle.\u201d <\/em>Moreover, there are structural drivers in the industry, he said, with many looking to e-commerce as a catalyst.<\/p>\n

\u201cHealthy communities are one driver; two is vacancy rates are at all-time lows and there\u2019s been a real scarcity in many markets in the U.S. which are at historic low levels,\u201d <\/em>Caton said. \u201cThird is customers are really prioritizing their logistics real estate. Logistics real estate is a key factor for executing a successful concept and so we see our customers willing to step up and pay for good quality space.\u201d<\/em><\/p>\n

Areas in the U.S. with the highest rental growth were the San Francisco Bay Area, Seattle, Southern California, New Jersey\/New York and Austin, Texas.<\/p>\n

Other regions posted large increases as well, with China leading the pack with 8 percent growth, the fastest growth in the world. Europe, meanwhile saw rents rise 5 percent, nearly doubling in growth from the year prior.<\/p>\n

The top five markets in Europe were Rotterdam, Budapest, Prague, Greater Silesia and Hannover. \u201cEurope had been lagging and rent growth was on a net-effective basis, so very strong growth there,\u201d <\/em>Caton said. \u201cI think what that means is for people who participate in logistics real estate, staying current on the market is more important than ever before. The rent that customers are paying to lease space, because these are multi-year contracts, regularly five years or more, the rent that folks are paying can often be materially different from what market rent is so staying current on the market is really important.\u201d<\/em>     <\/p>\n

Construction recovery<\/strong><\/h2>\n

The report noted that new construction costs are increasing at historically high rates, prompting mid- to high-single-digit annual growth with leading markets well into double digits.<\/p>\n

\u201cWe expect new deliveries in the calendar year 2019 to be 260 million square feet, which is about the same level as last year and it\u2019s up from years prior,\u201d <\/em>Caton said. \u201cIt\u2019s really been building steadily over the last seven years and it has come on at a pace of recovery that has been slower than many anticipated, particularly considering the strong fundamental performance, as well as the value performance of the industry.\u201d<\/em><\/p>\n

Looking ahead, Prologis forecasts that despite macro volatility, market vacancy rates will remain at historic lows in 2019, causing higher rental higher in pursuit in the U.S. Additionally, strengthening conditions in Europe are expected to shift growth leadership towards the region.<\/p>\n

\u201cBusiness is good but at the same time, there seems to be more uncertainty than we\u2019ve had in a while and a lot of that is political in nature and that could cause a slowdown in the macro economy and that could influence logistics real estate, too,\u201d <\/em>Caton said. \u201cOn the one hand, I think it\u2019s appropriate at this stage in the year to be prudent and watchful. On the other hand, if I\u2019m a customer and I\u2019m planning on leasing space later this year or next year, I think it\u2019s been a really hard operating environment for those customers. I think the customers with a thorough planning process and ability to act early stand the best chance of securing space at the best rate.\u201d<\/em><\/p>\n

In January, Prologis launched construction on two Class A industrial facilities in the Los Angeles area<\/a> totaling more than 346,000 square feet.<\/p>\n

Image courtesy of Prologis<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"

A key takeaway: Rents posted considerable gains in 2018, increasing 8 percent in the U.S. and 6 percent worldwide.<\/p>\n","protected":false},"author":451,"featured_media":1004295419,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[21808,21748,16,23891,21742],"tags":[32956],"class_list":["post-1004295410","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-featured","category-industrial","category-international","category-national","category-latest","tag-prologis"],"acf":[],"yoast_head":"\nPrologis Reports on Logistics' Global Growth - Commercial Property Executive<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.commercialsearch.com\/news\/prologis-reports-on-logistics-global-growth\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Prologis Reports on Logistics' Global Growth\" \/>\n<meta property=\"og:description\" content=\"A key takeaway: Rents posted considerable gains in 2018, increasing 8 percent in the U.S. and 6 percent worldwide.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.commercialsearch.com\/news\/prologis-reports-on-logistics-global-growth\/\" \/>\n<meta property=\"og:site_name\" content=\"Commercial Property Executive\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/CPExecutive\" \/>\n<meta property=\"article:published_time\" content=\"2019-01-31T11:16:06+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2022-03-03T17:47:45+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2019\/01\/Chris-Caton.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"800\" \/>\n\t<meta property=\"og:image:height\" content=\"620\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"Keith Loria\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@cpexecutive\" \/>\n<meta name=\"twitter:site\" content=\"@cpexecutive\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.commercialsearch.com\/news\/prologis-reports-on-logistics-global-growth\/\",\"url\":\"https:\/\/www.commercialsearch.com\/news\/prologis-reports-on-logistics-global-growth\/\",\"name\":\"Prologis Reports on Logistics' Global Growth - 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