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While demand for property is cooling down, warehousing biggies are chalking slightly different strategies - like amassing gigantic scale. What it essentially translates into
There’s been an industry paradigm shift from massive warehouses in peripheries to smaller fulfillment centres within cities.
Reports indicate national average vacancy rates falling by 3.4% for warehouses in Q1. Leasing rates have also zoomed by 7% in the period.
Biggies bite the bait
📌 Prologis, the biggest global warehouse space owner, is buying Duke Realty Corp for USD26 billion, enriching its portfolio by 160 million sq. ft. The company already has more than 1 billion sq. ft. in its kitty.
📌 Amazon has already scaled up its logistics infra throughout the pandemic. It has taken a pause and will sub-lease 10 million sq. ft. However, there’s no denying that it has bitten off more than it can chew in the past.
📌 MRP Industrial is also building 7 million sq. ft. of industrial space.
What experts feel
📉 Slight dips in demand for warehousing space and lower growth in rental rates, plus bigger players consolidating their hold on the market.
📈 Market fundamentals continue to be stable, especially on the back of record-positive figures.
Takeaway: Till the time rentals and demand zoom up again, expect more behemoths to keep scaling their industrial portfolios.