Business1 min read

Prologis CEO says warehouse demands are shifting fast. Here's how he's keeping up

By · Published by Everything Blog

In short

A survey of over 1,800 business leaders indicates a sharp move toward nearshoring and regional fulfillment to bring goods closer to end consumers. In response, industrial landlords are being tasked with funding and developing on-site clean energy infrastructure, such as solar generation and electric fleet charging. Prologis has adapted by divesting more than 200 million square feet of unsuitable space while scaling an energy business that generates over 1.4 gigawatts. Additionally, three-quarters of executives are preparing major investments in artificial intelligence tools for inventory replenishment and demand forecasting.

Key points

  • Energy reliability driven by artificial intelligence needs has become the leading factor…: Energy reliability driven by artificial intelligence needs has become the leading factor in warehouse site selection.
  • Over a quarter of business executives expect industrial landlords to develop and fund on-…: Over a quarter of business executives expect industrial landlords to develop and fund on-site energy infrastructure directly.
  • Seventy-five percent of surveyed leaders intend to make major investments in artificial i…: Seventy-five percent of surveyed leaders intend to make major investments in artificial intelligence for forecasting and inventory replenishment.

Sources checked by our analysis pipeline: 1

A version of this article first appeared in the CNBC Property Play newsletter with Diana Olick. Property Play covers new and evolving opportunities for the real estate investor, from individuals to venture capitalists, private equity funds, family offices, institutional investors and large public companies. Sign up to receive future editions, straight to your inbox.

There will always be some need for massive, centralized warehouses, but rising demand for faster deliveries and resilient energy supplies have companies rethinking where their warehouses should be.

In fact, 91% of company leaders said retailers and logistics providers "urgently" need more decentralized fulfillment networks to meet delivery expectations, according to a new survey from Prologis, in partnership with the Harris Poll. Responses came from more than 1,800 business leaders in the U.S., U.K., Germany, India, China and Mexico.

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