Big names are locked in battle for warehouses

by Steve Randall on 30 Oct 2019

An Amazon-fueled battle is underway to acquire prime warehouse space south of the border.

Bloomberg reports that two of the largest players in commercial real estate investment – Blackstone Group and Prologis – have already done deals for more than $38 billion worth of warehousing in 2019.

“There’s a huge amount of demand coming from e-commerce,” said Lindsay Dutch, a Bloomberg Intelligence analyst. “The growth of online shopping and the desire for quick delivery times has really driven a need for more warehouses, especially in the last mile.”

The latest deals mean that between them, Blackstone and Prologis will own more than 1.1 billion square feet of US warehouse space, more than the next 14 largest owners combined.

With available capital, the two investment firms are able to move quickly and, in many cases pay a premium to acquire warehouses.

Bloomberg says that the ecommerce market has growth potential, quoting eMarketer data that shows that just 4% of food and beverage sales are currently sold online. Automation and faster delivery times are accelerating the popularity of ecommerce.

Amazon is also widely expected to move to one-day delivery which will raise the game further, again fueling demand for more warehouses.

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