The importance of logistics real estate, particularly since the beginning of 2020, where Covid-19 has accelerated the move to e-commerce by around four years, has been underpinned by a the announcement that global logistics real estate leader, Prologis, has seen its share of the global flow of goods through its facilities increase to 2.5% of global GDP from 1.7% in the past three years, since 2017, equivalent to 4.4% of worldwide household consumption. This rise in Prologis’ market share coincides with a rapid expansion in the company’s global warehouse space to over 1.0 billion square feet, from 684 million sq ft, over the same period, a new research report from Oxford Economics concludes. The current economic value of goods flowing through Prologis facilities worldwide is $2.2 trillion, a 69% increase over 2017.
Hamid R. Moghadam, Prologis chairman and CEO, said: “This study shows just how critical logistics real estate is to the vitality of the global economy, Every day, Prologis sees many of the goods that make modern life possible flow through our distribution centers, which in turn underscores the interconnected nature of global trade.”
Key insights from the new study include the following:
- The current economic value of goods flowing through Prologis facilities worldwide is $2.2 trillion a 69% increase over 2017 (1). This figure underscores the diversity of the Prologis customer base and the scale and value of the company’s global real estate portfolio.
- This $2.2 trillion in throughput represents 3.5% of the gross domestic product (GDP) of the 19 countries in which Prologis operates. In 2017, the company’s portfolio spanned 684 million square feet (2),and throughput represented 2.4% of the GDP of those same 19 countries (2). The increase speaks to Prologis’ growth strategy and the scale of its platform, which comprises nearly 1 billion square feet today.
- The flow of goods through Prologis buildings represents 2.5% of global GDP—4.4% of global household consumption. In 2017, the flow of goods was 1.7% of global GDP.
- Prologis is a powerful supporter of jobs in its communities; each day, approximately 850,000 (3) people go to work under Prologis roofs, a 57.4% increase over 2017(3).
Please see below the full version of the The Oxford Economics study.
(1) Based on 2019 data per Oxford Economics report
(2) Per Oxford Economics, it is important to note that GDP represents the total value of all final goods and services production. Some warehouses may be used to store intermediate goods (i.e. components used in the production of final goods), and of course services do not need to be stored, and a single good will often be stored in multiple warehouses on its way to final consumers.
(3) Based on estimates available in 2017, Oxford Economics assumed that direct employment at Prologis warehouses would be one worker for every 743 square feet (69 square meters) of warehouse space globally. Subsequent research by Prologis has refined this estimate and resulted in the country-specific estimates of 1,000-1,900 square feet per direct employee. Based on the original assumption, we estimated total direct employment of 816,200 workers in Prologis warehouses in July 2017. Updating the previous assumption, however, Oxford Economics would estimate total employment in Prologis warehouses in 2017 of 539,900.