The U.S. will need to add 330 million square feet of warehouse space dedicated to online distribution sales by 2025 in order to keep pace with the expected increase in e-commerce sales over the same time period, according to a recent report by CBRE. Driven 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 the latest CBRE estimates.
CBRE expects e-commerce sales in the U.S. will increase to 26% of retail sales by 2025. Globally, there will need to be an increase of 1.5 billion square feet to keep up with a $1.5 trillion uptick in e-commerce sales by 2025. The U.S. and Mainland China are the biggest e-commerce markets in the world, accounting for 57 percent of global internet sales.
“E-commerce has grown steadily over the years, and it will continue at a strong pace for the foreseeable future,” said John Morris, Executive Managing Director and Leader of CBRE’s Americas Industrial & Logistics and Retail businesses. “As a result, distribution and supply chain networks will continue to be under pressure to meet demand at a time when industrial vacancy is at record low levels. A significant amount of new construction will be needed in the next few years just to keep pace with robust demand.”