Research - MAY 20, 2020

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Supply chain shifts poised to generate substantial new industrial demand

by Andrea Zander

Prologis Research estimates in excess of 400 million square feet (37 million square meters) or more of total additional U.S. logistics real estate demand will be created in the next two to three years as companies adjust to higher e-commerce volumes and higher inventory levels. This translates to an estimated increase in demand of 150 million to 200 million square feet per year for two to three years.

The estimates are based on expectations that re-tooling supply chains for increased e-fulfillment will create incremental net demand of 140 million to 185 million square feet in total. E-fulfillment demand will likely be highest in last-mile locations near end-consumers, such as in Prologis’ Last Touch and City Distribution properties. In addition, Prologis foresees customers boosting inventories by 5 percent to 10 percent in a bid to boost resiliency, which would generate 285 million to 570 million square feet of aggregate incremental demand. New demand from inventory growth

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