E-Commerce Demand Continues to Drive Prologis' Growth

Accelerated e-commerce adoption and higher inventory levels have the potential to generate 400 million square feet or more of additional US logistics real estate demand or 150 to 200 million square feet per year for two to three years, Prologis reports. E-commerce requires more than three times the logistics space of brick-and-mortar sales. This persistently high ratio supports the need for additional e-fulfillment space should e-commerce penetration retain gains made during the stay-at-home phase.

These trends are borne out in the REIT’s third quarter activity. E-commerce represented 37% of Prologis’ rental revenue compared to its historical average of 21%. It reports that demand for space is coming from both omnichannel and pure online retailers, along with third-party logistics firms and Amazon.com. Amazon accounts for about 13% of the company’s new leasing.