Despite Overall Economic Slowdown, Demand for Large Distribution Center Space Marches On

December 2, 2020

Due to the COVID pandemic, the economic structure of almost all countries is low currently. It is seen that despite the overall economic slowdown, demand for large distribution center space continues to march on.

The US economy contracted by 31.4% and according to the final estimate released by the Commerce Dept., but demand for warehouse space in the US continued its upward arc.

Here’s what news reports say:

According to a new report on the North American warehouse market through the first half of 2020 from real estate firm Colliers, net occupancy gains for warehouse space was up a very strong 51% over the 52.8 million square feet transacted at mid-year 2019.

The strong demand was driven by “Pandemic-induced growing reliance on eCommerce retailers for basic goods, fueled demand for industrial big-box products as supply chains continued to be right-sized, shifting away from “Lean” inventory strategies that proved sound in the past,” Colliers says. It defines “big box” warehouses of over 200,000 square feet in size. A total of 96.5 million square feet of new supply was added to the market in the first half, and an additional 170.7 million square feet of big-box space remains under construction.

Amazon leased about 26.9 million square feet in the first half of 2020. Colliers projects that Amazon will take over nearly 100 million square feet across the US in 2020 alone, the report said.

The report adds that in North America there are currently just under 4000 distribution centers of 200,000 to 499,000 square feet, with just 257 of them unoccupied.

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