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The most useful way to judge a project is to separate three questions: what rent measure is being reported, what supply-chain problem the building solves, and who bears the local costs and receives the benefits. Global averages describe market cycles; local outcomes depend on siting, timing, transport routes, land alternatives and governance.
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Why companies keep expanding warehouse networks
Warehouse demand follows the design of supply chains rather than a single trend such as online shopping. Retailers need inventory positioned near customers, manufacturers need components and finished-goods staging, and importers need space connected to ports, rail and highways. Companies also redesign networks when freight routes become unreliable, trade patterns change or production moves closer to end markets.
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- E-commerce and last-mile delivery: Faster delivery requires facilities close to dense customer markets, while larger regional centers replenish those urban sites.
- Nearshoring and manufacturing diversification: New or relocated factories create demand for receiving, kitting, storage and outbound distribution space.
- Inventory strategy: Firms may hold more safety stock after disruptions, or reduce stock and rely on faster replenishment. Either decision can change the amount and location of space they lease.
- Reverse logistics: Returns, repair, recycling and resale require capacity that a conventional outbound-only model does not provide.
- Urban logistics: Dark stores, dark kitchens and consolidation hubs can shorten final delivery legs, while large suburban warehouses handle regional volumes.
JLL’s Global Real Estate Perspective: Highlights, February 2025 reported that occupiers delayed some decisions and made greater use of existing space amid uncertainty and high costs. The same report identified continuing e-commerce growth, last-mile demand, nearshoring and manufacturing diversification as longer-run supports. That combination explains why construction can remain active while leasing slows: a company may need a different location or building specification but postpone signing until costs and demand become clearer.
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What the latest rent numbers mean
“Warehouse rents” can refer to different prices. Asking rent is the advertised rate for available space. Net effective rent adjusts the economic value of a signed lease for concessions such as free-rent periods or landlord-funded improvements. A market can show stable asking rents while effective rents fall because landlords offer larger incentives, or the reverse if incentives are withdrawn.
Prologis global logistics-rent indexes
Prologis Research’s 2025 report, 2024: Market Rents Reset After Years of Outperformance, recorded 5% lower global logistics real-estate rent growth in 2024. The index measures net effective rents on signed leases and weights regional and global results by estimated market revenue. It is an industry index, not a census of every warehouse lease. Prologis said oversupply pressured particular markets and that rent patterns differed substantially by location.
Its 2026 report on 2025 results recorded a further 3.7% global decline, with a 4.9% decline in the United States and Canada and a 2.9% decline in Europe. Prologis reported that global rents fell 2.3% in the first half of 2025 and 1.4% in the second half, indicating a slower pace of decline. These figures still describe signed-lease net effective rents in the company’s coverage, not every asking quote or lease type in every country.
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1Clear out junk files and repair common Windows errors2Fix the driver behind crashes, sound loss and screen glitches3Repair Windows errors before they cause bigger problems| Measure | Reported result | How to interpret it |
|---|---|---|
| Global logistics rent growth, 2024 | -5% (Prologis Research, 2025) | Net effective rent on signed leases; global weighted index |
| Global logistics rent growth, 2025 | -3.7% (Prologis Research, 2026) | Continued decline, slower than 2024 |
| United States and Canada, 2025 | -4.9% (Prologis Research, 2026) | Regional net effective-rent result |
| Europe, 2025 | -2.9% (Prologis Research, 2026) | Regional net effective-rent result |
| Global first half versus second half, 2025 | -2.3% then -1.4% | Prologis’s reported half-year pace, showing moderation |
Leasing activity was uneven by region
JLL’s 2025 global report, covering 2024 activity, found North American gross leasing 27% below 2023, European take-up 5% below 2023 and in line with 2019, and Asia-Pacific net absorption 13% below 2023. Gross leasing, take-up and net absorption are not interchangeable measures, so these percentages should not be combined into a single global demand rate. They do show that timing and geography matter: a project may enter a market during a leasing pause even when long-term network demand remains sound.
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Why adding warehouses can lower rents in one place and raise them in another
Rent direction depends on the interaction of demand and usable supply. A large construction pipeline can give occupiers alternatives and force landlords to compete, especially when a market has vacant older buildings. Effective rents may fall through concessions before advertised rates change. Conversely, a location with scarce industrial land, strong job growth, port access or strict planning limits can support higher rents even while other regions soften.
Timing creates different outcomes
- Announcement: A developer obtains land or permission based on an expected need, often before a tenant commits.
- Construction: Financing, materials and permitting can delay delivery. During that period, demand may strengthen or weaken.
- Lease-up: If several buildings complete together, landlords compete for the same occupiers. If a key manufacturer or retailer arrives, the new space may fill quickly.
- Adjustment: Rents reflect the resulting vacancy, incentives and tenant mix. The effect can differ from the assumptions that justified construction.
For a market-level comparison, track the construction pipeline, completed inventory, vacancy or availability, signed leasing and occupier use of existing space together. A falling rent index does not prove that warehouses are unnecessary; it may indicate that supply arrived ahead of near-term demand or that tenants shifted to cheaper, better-located space.
What warehouses add to supply chains—and what they do not prove
Well-sited facilities can shorten delivery routes, provide buffer inventory, connect factories to customers and give companies alternative nodes when one port, road or plant is disrupted. A building near a population center may support last-mile delivery; one near a port or rail terminal may reduce a longer inland leg; a facility near a cluster of manufacturers may support component flows and production diversification.
Those functions are capacity benefits, not automatic proof of a net community benefit. A warehouse can move freight more efficiently for a company while shifting truck traffic onto a particular neighborhood, consuming land that could have served housing or public uses, or creating jobs that are difficult to reach without a car.
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Prologis’s 2025 Economic Impact Report estimated that $3.2 trillion of goods produced or sold globally passed through Prologis facilities in 2024. That is a company-specific estimate from an Oxford Economics impact report commissioned by Prologis. It describes goods moving through that company’s facilities; it is not a statistic for all warehouses or for the global logistics industry.
How local communities experience expansion
Freight, air quality and congestion
The OECD and International Transport Forum’s 2024 report Urban Logistics Hubs states that freight transport is responsible for around half of local air pollutants in cities and contributes to congestion and other emissions. The statement concerns urban freight transport as a whole, not warehouse buildings in isolation. A warehouse’s local effect depends on truck volume, vehicle type, delivery schedules, route design, idling, nearby homes and the availability of rail or other alternatives.
The OECD summarizes the policy challenge with the sentence, “Urban logistics are fundamental to city life.” That importance does not resolve where facilities should go. A city may need distribution capacity while also setting rules for truck routes, operating hours, curb access, noise, emissions and cumulative exposure.
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A 2023 Mineta Transportation Institute study, Report 23-35 by Lu and colleagues, modeled Southern California through 2040. The analysis was prompted by California’s 2021 executive order encouraging use of state land to increase warehouse capacity after pandemic supply-chain disruptions. It compared warehouse and housing demand and tested transport and environmental scenarios.
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The model found that warehouse land-use scenarios increased the number of air-pollution hotspots, even when truck-electrification scenarios were included. It also identified a possible employment benefit and reported a positive association between low-income housing demand and unemployment. These are modeled relationships under the study’s assumptions, not measurements that apply to every region. They show why a proposal should be assessed alongside housing demand, job access and exposure—not by warehouse capacity alone.
Jobs and distribution of benefits
Employment counts do not answer whether residents benefit. Decision-makers should ask whether jobs are accessible by transit, whether wages and schedules support local households, whether positions are durable, and whether training pathways exist. They should also map who experiences truck traffic and pollution, since the people receiving jobs may not be the people living along freight routes.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.Land-use choices and public agreement
Every warehouse occupies land that could serve another purpose. The relevant comparison may include housing, manufacturing, food production, open space, schools, utilities or flood protection. The opportunity cost differs sharply between a port-adjacent brownfield and farmland on an urban edge.
Japan’s Ministry of Land, Infrastructure, Transport and Tourism, in a 2025 announcement summarizing its report on the future of logistics facilities, listed network-wide facility placement, aging facilities, coastal supply constraints, changing truck operations and community agreement among the issues. The inclusion of community agreement is significant: logistics infrastructure is a network decision, but its impacts are experienced locally.
A practical comparison framework
| Question | Evidence to request | Why it matters |
|---|---|---|
| What rent is changing? | Signed-lease net effective rent, asking rent, concessions and period | Prevents unlike prices from being treated as the same |
| Is supply needed? | Pipeline, vacancy, availability, absorption and tenant commitments | Shows whether new space fills a gap or adds competing capacity |
| What network role does it serve? | Distance to ports, customers and factories; last-mile, nearshoring or diversification purpose | Tests the operational case for the location |
| Who bears local effects? | Truck routes, vehicle counts, idling, congestion, emissions and noise by neighborhood | Reveals exposure that a regional capacity figure can hide |
| What are the alternatives? | Housing and other land demand, brownfield reuse, rail access and distributed sites | Measures opportunity cost and possible mitigations |
| How is consent secured? | Planning rules, impact reviews, resident participation and enforceable conditions | Turns community agreement into a governance requirement rather than a slogan |
How to evaluate a warehouse proposal step by step
- Define the market and date. Specify the city or region, the reporting period and whether figures are asking or net effective rents.
- Map existing capacity. Count vacant, obsolete and under-construction space, not just planned floor area. Identify whether existing buildings can meet the tenant’s specifications.
- Identify the supply-chain problem. Require a clear explanation of the customers, factories, ports or routes the facility serves and why another location would not work.
- Model freight movements. Estimate truck trips by hour, route, vehicle type and operating scenario. Include cumulative traffic from nearby facilities.
- Compare land alternatives. Test redevelopment, smaller distributed sites, rail-connected locations and non-warehouse uses, including housing where demand is documented.
- Assess jobs and exposure together. Report job quality and accessibility alongside pollution, noise and congestion by neighborhood.
- Attach enforceable conditions. Examples include routing rules, delivery-hour limits, anti-idling requirements, monitoring, electrification timelines and funding for road or transit improvements.
- Set a review trigger. If leasing, vacancy or freight assumptions change materially, require the project or its operating conditions to be revisited.
What can—and cannot—be concluded globally
The available evidence supports a cautious conclusion. Global logistics rents declined in 2024 and 2025 in Prologis’s net effective-rent indexes, while JLL documented weaker 2024 leasing or absorption than in 2023 across North America, Europe and Asia-Pacific. Those results show a market adjustment with substantial regional variation; they do not establish that every new warehouse lowers rents or that expansion is ending.
The evidence also supports a distinction between network capacity and local welfare. OECD’s urban freight analysis explains why distribution is essential and why freight creates pollution and congestion. The Southern California scenario study demonstrates how warehouse-oriented land use can increase modeled pollution hotspots while potentially supporting employment. Japan’s policy discussion shows that placement, aging infrastructure, changing operations and community agreement are inseparable planning questions.
There is no harmonized global panel in the cited material connecting warehouse construction to local rents, housing affordability, jobs, health and emissions in every market. Local claims therefore require local vacancy data, lease terms, freight modeling, land-use alternatives and public-impact analysis. A global index can describe direction; it cannot decide whether a particular site is worth its costs.
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