As global trade volatility intensifies, businesses face the challenge of navigating complex market conditions while seeking growth opportunities. The latest Prologis Industrial Business Indicator (IBI) report reveals a potential turning point for logistics real estate demand that may offer valuable insights.
The third-quarter IBI activity index registered at 53, indicating a rebound in logistics real estate market activity compared to the first half of this year. This improvement primarily stems from significant gains in net absorption, new lease signings, and pipeline project inventories. These key metrics demonstrated healthier growth patterns in Q3 compared to 2024 averages, signaling gradual market confidence restoration.
Nonlinear Recovery Pattern Emerges
While the IBI shows positive momentum, the report notes that supply chain activity peaked in early 2025 before retreating due to trade fluctuations. This suggests the logistics real estate recovery isn't linear, presenting both opportunities and challenges for market participants.
Currently, large corporations and e-commerce companies serve as the primary growth drivers. However, analysts anticipate broader industry participation will gradually emerge, collectively propelling sustained market development.
Key Indicators Show Promise
The increased net absorption reflects growing demand for existing logistics space, demonstrating corporate optimism about future expansion. Rising new lease signings reinforce this trend, showing more businesses actively seeking additional logistics capacity to accommodate growth.
Expanding pipeline inventories suggest forthcoming supply increases, potentially offering tenants greater selection and flexibility. The Prologis IBI synthesizes multiple factors—including absorption rates, leasing activity, rent growth, and vacancy rates—to provide comprehensive market health assessments for investment decision-making.
Diversified Demand on the Horizon
While e-commerce and large enterprises currently lead market recovery, other sectors show signs of rebounding demand. As global economic conditions stabilize, logistics real estate requirements are expected to diversify, creating broader development prospects across industries.
Market participants should monitor evolving conditions closely and adapt strategies accordingly to capitalize on emerging opportunities in this dynamic environment. The Prologis IBI report ultimately portrays a logistics real estate market at a critical inflection point—one demanding vigilance and strategic agility from businesses seeking sustainable growth.