As consumers return to spending, the industrial & logistics (I&L) real estate is experiencing an uptick.
According to a new report from CBRE May's record 17.7% increase in U.S. retail sales shows that this area of the economy is bouncing back. Improved sales were seen in apparel, furniture, sporting goods and building materials.
The I&L property market looks set to recover quickly from the COVID-19 downturn and gain from the forced growth of the digital economy, the firm said.
Some concern remains however as May retail sales were still down by 6.1% from last year and COVID-19 is not fully suppressed.
But the secular shift to home delivery continues apace, with online sales up 9% in May and up 31% for the year.
Highlights from the analysis include:
- Within the I&L sector, leasing activity for bulk space had its best month of the year in May after a slowdown in April.
- Total leasing activity so far this year is 2.8% higher than last year, with the share of renewals increasing to 25.8%.
- Projects under construction remain near record highs at 313 million sq. ft., 33.2% of which is preleased.
- Growing appetite for online grocery has increased the need for cold-storage space and highlighted the acute shortage of available supply. This likely will lead to a significant increase in development in the coming quarters.
