Prologis has identified four patterns that emerged in China during the Coronavirus outbreak that could play out similarly in European and US industrial real estate markets.
In newly published report, one of the world’s largest industrial real estate owners said activity was picking up across its business and customers in China and that there were signs of economic recovery.
The research identified that, throughout the outbreak in China, logistics operations continued except where strict government lockdowns were mandated and also found that activity was most resilient among Chinese customers focused on end-consumption and city distribution, especially for e-commerce customers.
Prologis said despite lockdowns and travel restrictions, lease signing activity in China continued – albeit at a slower pace.
Logistics real estate in the US and Europe was likely to follow similar patterns and experience an overall softening in activity, Prologis said.
Its Industrial Business Indicator, which tracks customer activity in the US, indicates a slowdown, albeit not as deep as during the global financial crisis.
“Consistent with the pattern in China, economic metrics in the US and Europe are showing a sharp deceleration in activity,” Prologis said.
“Notably in the US, initial unemployment claims reached their highest-ever levels and US and Europe services [purchasing managers’ indices] fell to all-time lows.”