In the latest episode of The REIT Report: NAREIT's Weekly Podcast, Chris Caton, global head of research for industrial REIT Prologis (NYSE: PLD), discussed the some of the latest trends in the market for logistics real estate.
Earlier in March, Prologis published a report on the latest developments in the industrial sector. Prologis found that rent growth in the sector remained strong around the world.
Caton pointed out that rents were starting from a low point in the market cycle, which created room for growth. He also noted that the supply of additional space has come on line gradually. Another key to industrial rent growth, according to Caton, is that “the barriers to supply are starting to matter more.” Finally, he said demand for space is increasing.
Caton downplayed the suggestion that enticements for new competitors to ramp up development of industrial space will factor heavily in the market.
“Certainly there is room and a need for more development, but I think [the industrial real estate sector] is a pretty tough space to get in just from an industry perspective, to say nothing of the challenges around putting capital together to finance development,” he said.