A new research paper – "Logistics Real Estate on Track for Continued Rebound" – released by industrial real estate specialist Prologis provides an update on the leading indicators of demand for logistics real estate. The paper concludes that a recovery is underway in production, trade and inventories, which will translate to nearly 400 million square feet of positive net absorption globally in 2012.

With US trade and consumption past prior peak levels, inventories will need to grow faster — from unsustainable and near-record lows — in order to keep pace in the second half of 2011.

While inventories might not return immediately to their pre-recession levels, they are now below where the economy and consumption would warrant.

Prologis expects continued demand for logistics real estate and for net absorption as a percent of stock to surpass its pre-crisis peak level in 2012.

"The recession has been deeper and the recovery has been slower than anticipated, however, the global economy and the logistics real estate market are on track for a stronger rebound in the second half of 2011," says David C Twist (pictured), vice president, Prologis Research. "We expect to see increased demand for modern logistics space over the next 12 to 18 months."