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Logistics demand remains elevated

Global Real Estate Perspective, August 2021

Findings from JLL’s inaugural survey on The Future of Global Logistics Real Estate suggest that the current growth in the logistics sector will continue for the foreseeable future, with sentiment about the fundamentals driving occupational demand overwhelmingly positive.

The survey reveals several major themes that are expected to shape future demand. Leasing activity is expected to become much more broad-based although e-commerce will remain a major player. The biggest constraints on leasing activity are likely to be limited land availability and a lack of speculative building. And while the importance of sustainability is highlighted, our survey indicates that concrete action plays a relatively limited role in influencing occupier decision-making as yet.

In the second quarter robust occupier demand was maintained across all three regions while availability remains tight, particularly in the U.S. and Europe. E-commerce and 3PL’s continue to seek out new space and fuel demand. Elevated occupier demand coupled with supply constraints is leading to upward pressure on rents. In the U.S. rents are now the highest on record.

Future trends: 3PLs to benefit from need to navigate supply chain pressures
  • Remainder of 2021: The persistence of the virus is leading to new waves of infections in many parts of the world. This is impacting on usual business activity and capacity (e.g., staffing) in some markets, causing yet further disruption to global supply chains. With this disruption likely to persist for the remainder of 2021, a key focus will be ensuring that global supply chains stay resilient during peak shopping seasons.
  • Long-term: Due to permanent changes in consumer shopping habits induced by the pandemic, growth in online shopping is expected to remain at elevated levels going forward. This will continue to add pressure to global supply chains (currently reflected in tight freight capacity) and, as a result, 3PL operators will continue to flourish in tandem with the influx of goods that need to be delivered to consumers.