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BENEFICIARY OF LONG-TERM SECULAR SHIFT TO E-COMMERCE
Pandemic Related Demand Increase for Industrial Space Through 2022
Fueled by e-commerce growth, annual net industrial absorption will total more than 333 million sq. ft. by 2022, leading to
annual rent growth of 5.7%, according to CBRE estimates as of June 2020
This is more than triple the previously forecast demand based on new metrics that CBRE economic Advisors (CBRE EA)
has developed using e-commerce data resulting from COVID-19
In the COVID-19 era, e-commerce is fueling industrial demand more than ever, so basing forecasts solely on traditional
employment-based metrics is no longer enough. By incorporating e-commerce data into its industrial forecasting models
beginning in Q1 2020, CBRE EA is now able to more precisely forecast industrial rent, availability, absorption and
construction
The COVID-19 pandemic has resulted in significant gains in e-commerce's share of total retail sales, which should further
stimulate industrial demand and provide a short-term buffer to a more severe economic downturn
The Census Bureau reports that while every other major category of retail spending declined, non-store retail sales rose
by 9.5% in April and by 9.0% in May. Non-store's share of total retail sales jumped to 19.2% from 15.0% in April,
illustrating e-commerce's prominence during the pandemic. Although this share fell slightly in May when many traditional
retail stores reopened, it remained considerably higher than before the pandemic
Source: CBRE June 25, 2020.
Link: https://www.cbre.us/research-and-reports/US-Market Flash-Annual-Industrial-Demand-to-Hit-333-Million-Sq-Ft-by-2022.
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