A report from real estate specialist Prologis points to a strengthening of the US industrial market with the recovery transitioning into expansion.
The authors of the report – The Shape of the US Industrial Recovery – believe that this is being driven by three key factors:
• Effective rents expected to rise 25 per cent over next four years;
• Pent up demand: exhibited by strong net absorption in the fourth quarter and high readings from Prologis' proprietary Industrial Business Index survey of customer activity levels; and
• Broadening leasing velocity: market tightness is supporting rent growth in more asset types, in more markets and in more locations in those markets
"The US industrial cycle is clearly building on positive momentum and showing signs of expansion," says Chris Caton, vice president and head, Prologis Research. "New construction starts remain low, demand is increasing, and the housing market and e-commerce are playing an increasingly larger role. We expect a broader uplift in the US industrial property markets to occur for a period of time, and long-term outperformance particularly in infill locations in US global markets."