"Financial and operating results in 2015 exceeded expectations and reflected outstanding execution by the team and favorable market conditions," said Hamid Moghadam, chairman and CEO, Prologis. "We enter 2016 with record occupancy levels, substantial requirements from our customers to further optimize their supply chains, and strong institutional interest in our co-investment ventures.” “In spite of macroeconomic uncertainty, vacancy rates are at all-time lows. Discussions with our global customers support our view that the power of domestic consumption and the growth of e-commerce will continue to drive demand for well located distribution space, particularly in major gateway markets,” Moghadam added. “Given our expectations that supply and demand will reach equilibrium by the end of 2016 in the U.S., we anticipate an extended period of low vacancy that will support favorable operating conditions."
In comments to the Wall Street Journal the Prologis Chairman and CEO added,
"Products sold online can take up about three times as much space as products waiting to be shipped to and sold in stores, Mr. Moghadam said, mainly because online orders require individual packaging and shipping boxes, rather than being stored in pallets or large batches.
E-commerce sales increased about 9% over this past holiday season over the previous year, while overall retail sales rose about 3%, according to multiple industry estimates.
“If you even see modest growth in e-commerce, you have significant grown in demand for industrial space,” Mr. Moghadam said. “Online retail is a much less efficient supply chain in terms of space usage.”
"Gateway Markets" as used above is yet another moniker what I am trying to label Demand-Growth Markets. Largely urban, younger than many, creative more than extractive economies.
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