Prologis forecasts ‘moderate global rent growth’ in 2026

Warehouse relation Prologis sees “a caller rhythm is kicking off” successful 2026. Rental request was brushed successful the archetypal fractional of 2025 but improved successful the backmost fractional arsenic commercialized headwinds cleared and corporations refocused connected semipermanent proviso concatenation needs.

“Softness successful aboriginal 2025 gave mode to renewed enactment from ample users and e-commerce operators erstwhile commercialized policies fell into a narrower set of imaginable outcomes,” a Thursday study from Prologis Research said.

Weak trends were seen worldwide past twelvemonth arsenic planetary rents fell 3.7%. The mean rent diminution was 2.3% successful the archetypal fractional of the year, slowing to conscionable 1.4% by the 2nd half.

“This displacement marks a captious modulation play for occupiers, operators, investors and developers arsenic readying for 2026 accelerates,” the study said.

Prologis (NYSE: PLD) said request from consumption-oriented and e-commerce-related companies led the mode past twelvemonth portion the manufacturing analyzable remained weak.

Rents were down 4.5% crossed the U.S. successful 2025, with coastal markets seeing heavier declines—down 7.6% pursuing a 9.7% driblet successful 2024. The top-three performing markets successful the U.S. were Nashville, Tennessee; Houston; and Indianapolis.

By the extremity of the year, 40% of each markets were seeing level oregon affirmative rents arsenic caller proviso became constrained.

Global installation completions are expected to present 474 cardinal quadrate feet of abstraction to the marketplace successful 2026—the lowest level since 2018. (Further, Prologis expects U.S. completions to autumn to their lowest level successful a decade.)

High operation costs, regulatory barriers and tighter recognition markets are immoderate of the constraints connected caller builds. Prologis besides said lone a fewer companies are taking a accidental connected speculative projects and that astir are pursuing build-to-suit facilities with an accent connected consolidating and modernizing operations.

Replacement costs are presently 20% supra marketplace rents. Prologis said the marketplace resembles “early maturation phases from caller anterior cycles,” with request from ample companies searching for ample facilities starring the way.

“Supply has eased, request is accelerating and broadening, and the bottommost for rents is forming,” the study said. “As a result, Prologis Research expects mean planetary rent maturation successful 2026 with variability by location, size and quality.”

The company’s U.S. outlook, which was provided arsenic portion of its fourth-quarter study past week, calls for betterment successful cardinal metrics similar nett absorption, occupancy and rents.

It expects nett absorption of 200 cardinal quadrate feet successful 2026 compared to 155 cardinal quadrate feet past year. New warehouses coming online volition present 180 cardinal quadrate feet of space, down from 200 cardinal quadrate feet past year. The changes are expected to trim vacancies from 7.4% to astir 7.1% to 7.2%, placing upward unit connected rents passim the year.