Prologis, a leading logistics real estate company, expects the warehousing industry to rebound by late 2025. This projection comes despite market softness, driven by demand from Chinese e-commerce platforms and third-party logistics (3PL) providers. In a recent earnings call, Timothy Arndt, chief financial officer at Prologis, stated, “Overall, the bottoming process is underway, and we expect demand to remain soft in the near term.
The market vacancy is at or near its peak and will hover there as utilization improves, with global rents expected to bottom sometime mid-next year.
Chris Caton, managing director and global head of strategy and analytics at Prologis, added that the peak will continue into early next year, with recovery emerging later in the year and accelerating into 2026. Prologis reported strong third-quarter results, with revenues reaching $2 billion, a 6.5 percent increase from the previous year. Net income also jumped to $1 billion, up from $746 million in the prior year.
The company raised its projected spending on acquisitions for the year to between $1.75 billion and $2.25 billion. Occupancy rates across Prologis’ global portfolio dipped to 95.9 percent from 97.1 percent in the same period last year.
Prologis forecasts warehousing industry rebound
Arndt explained, “While occupancy and rent softened, we continue to deliver impressive net effective rent. This will bridge us through this soft patch to the next cycle of rent growth.”
Cushman & Wakefield, another major player, supports the bottoming trend observed by Prologis. Their quarterly MarketBeats report suggests that U.S. vacancy rates will peak at 6.7 percent midway through 2025, aligning with longer-term pre-pandemic averages.
Internationally, Prologis sees strong demand from 3PL providers and Chinese e-commerce giants like Alibaba and JD.com. Caton noted that 3PL providers represent about 20 percent of their total net absorption for 2024. The company operates logistics centers in Foshan, China, serving e-commerce fashion giant Shein.
Caton mentioned, “We are leasing with these customers, and yes, we think they will continue to lease space into next year and beyond. Their businesses are diversifying, signing long-term leases and investing in their space.”
Prologis also reported limited damage to their properties despite recent hurricanes in the U.S.
Cushman & Wakefield anticipate that the engines driving demand for industrial space—e-commerce, consumer spending, housing recovery, and onshoring—will kick into higher gear in 2025.
