Why industrial real estate prospects may weaken

While industrial real estate performance is expected to remain strong in the near term, longer-term prospects are more uncertain, according to Oxford Economics. Three specific factors — shifts in e-commerce trends, technological advancement, and decarbonization policies — will have a profound effect on industrial real estate from 2030 onward.

Near-term volatility aside, Oxford Economics anticipates that online sales growth will stabilize in most economies in the medium term — halfway through the 25-year forecast period in some instances — taking some of the steam out of e-commerce industrial demand.

Advancements in automation and robots are being integrated into industrial environments. As new technologies are incorporated into the sector, Oxford Economics expects the efficiencies gained will further reduce aggregate demand for industrial real estate. A continued focus on new, high-specification facilities by occupiers will result in increased capital expenditu