E-Commerce Growth Driving Demand for Added Warehouse Space Says CBRE

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.”