E-Commerce Boom Fuels Logistics Real Estate Growth, Says Prologis

By Maria Kalamatas | The Logistic News | April 1, 2025

In a new report that underscores the transformative impact of e-commerce on logistics infrastructure, Prologis has revealed that online retail continues to be the single most powerful driver of logistics real estate growth globally. The insights, released in late March, provide a detailed overview of how shifting consumer behavior and rising service expectations are reshaping warehouse demand, facility design, and investment strategies.

E-Commerce at the Core of Expansion

The report highlights a robust increase in logistics space absorption linked directly to e-commerce, estimating that every $1 billion in new e-commerce sales requires roughly 1.25 million square feet of additional logistics space. With digital retail sales forecasted to exceed $7 trillion globally by 2027, the demand for strategically located, modern logistics properties is expected to remain on a steep upward trajectory.

“Consumer expectations around speed, availability, and convenience are pushing companies to rethink their fulfillment networks,” said Hamid Moghadam, CEO of Prologis. “This is not just about last-mile proximity; it’s about building resilient, data-driven ecosystems that allow retailers to meet demand efficiently and sustainably.”

Urban Logistics and Automation Dominate Development

The report notes a shift toward urban logistics hubs, which now account for nearly 40% of new warehouse investments in key Prologis markets. These facilities, typically located within 20 miles of major population centers, are being optimized for rapid delivery and automation, integrating AI, robotics, and advanced warehouse management systems.

Prologis emphasized that tenants are prioritizing flexible, tech-enabled spaces with sustainability certifications, such as BREEAM and LEED, which are increasingly seen as standard requirements rather than premium features.

A Supply-Demand Gap Persists

While demand continues to grow, supply remains constrained due to zoning restrictions, labor shortages, and construction material inflation. The report warns that this imbalance could create long-term challenges in keeping pace with the operational needs of logistics operators and e-commerce brands.

To mitigate these risks, Prologis is expanding its build-to-suit program and accelerating investments in redevelopment projects, particularly in infill urban locations. “Speed-to-market is everything,” the report states, “and those who control the best-located assets will win.”

Sustainability and Resilience Take Center Stage

In response to growing pressure from regulators and investors, the logistics real estate sector is moving rapidly toward decarbonization. Prologis now derives over 60% of its energy for warehouse operations from renewable sources and is rolling out solar panels across more than 70% of its global portfolio by 2027.

Additionally, the report touches on the rising importance of resilience in site selection. Companies are increasingly evaluating assets based on climate risk, access to alternative transport modes, and energy independence.

Outlook: High Growth, High Expectations

Looking ahead, Prologis projects that demand for logistics space will outpace supply through 2026, especially in high-growth corridors such as North America’s Sunbelt region, Northern Europe, and Southeast Asia. The firm sees continued investment from retailers, 3PLs, and manufacturers reshoring operations as key contributors to this growth.

As e-commerce evolves and logistics networks become more complex, Prologis’ report affirms that real estate will remain a critical strategic asset in the supply chain.

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