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More than 305 million square feet of warehousing space was under construction in the second quarter as Prologis, the world’s largest operator of industrial real estate, increased its bid for Segro in the United Kingdom.
Figures from real estate services firm Cushman & Wakefield reflect an 18% increase in warehouse construction between April and June, the second consecutive quarter of annual growth. The increase in development marks a change from the slow activity in the past few years after high inventories of empty warehouse space led to the highest vacancy rate in over a decade.
The news comes as Prologis sweetened its offer to buy Segro, a London-headquartered property investment company that develops commercial property in the United Kingdom and Continental Europe, focusing on areas around cities and key transport hubs. “There is no doubt a combination of both companies would deliver meaningful value,” said Prologis Chief Executive Dan Letter.
Prologis itself said it plans to start work on $4.5 billion to $5.5 billion of developments in 2026, with about 40% of starts this year expected to be data centers.
IAM Member Impact: Renewed development suggests demand (and eventually rents) may firm up again, so members with upcoming lease renewals should plan ahead rather than assume today’s pricing holds. The Prologis-Segro tie-up is also one to watch for members operating in the UK and Continental Europe, since consolidation among major industrial landlords could reshape available inventory.
Source: Wall Street Journal