Logistics property rents step higher amid pandemic — Prologis report

From Freight Waves.

Global rents on industrial real estate properties increased 2.9% during 2020, according to logistics real estate giant Prologis Inc. (NYSE: PLD) Even with several sectors of the economy meaningfully impacted by the pandemic, tenants were willing to pay up for logistics space.

The San Francisco-based company published its annual Logistics Rent Index Wednesday.

The report showed rents in the U.S. and Canada climbed 3.2% during the year as surging e-commerce growth accelerated need for current and incremental space. Many supply chains are reevaluating inventory needs, often opting to carry higher stock levels to avoid future shortages. Further, supply chains are seeking locations closer to consumers to shorten delivery times and improve e-commerce execution.

“[The] willingness to spend on expanding logistics networks has increased as users view e-commerce distribution and speed to market as competitive advantages for revenue generation,” the report stated. “At the same time, the incremental cost of logistics real estate remains a small portion of total supply chain costs, with rents representing approximately 5%.”

See the complete article from Freight Waves online.