Prologis report sees logistics demand strengthen and rents stabilizing

Summary

Prologis’ report “2025: Pause Shifts to Progress as Rents Approach Inflection” shows a turning point for logistics real estate. After rents fell 2.3% in the first half of 2025 amid leasing pauses and economic uncertainty, tenant decision-making returned in the second half and rent declines narrowed to 1.4%.

The report highlights a sharp rebound in demand: seasonally adjusted net absorption rose to 434 million square feet in H2 2025 versus 213 million SF in H1. By Q4 net absorption outpaced new supply, suggesting vacancy rates are at or near their peaks and that rental stabilisation is underway across many markets.

Prologis also notes constrained completions—driven in part by replacement costs roughly 20% above market rents—which will keep deliveries at their lowest level since 2018. That, combined with a concentration of new supply in mid-size units (100k–300k SF), is increasing scarcity for large, high-quality big-box space and pushing more users toward built-to-suit solutions.

Key Points

Rents fell 2.3% in H1 2025 but the decline eased to 1.4% in H2 as leasing resumed and longer-term planning returned.
Net absorption climbed to 434 million SF in H2 2025 (seasonally adjusted), up from 213 million SF in H1—signalling a demand inflection.
By Q4 2025 net absorption exceeded new supply, indicating vacancy rates may be at or near peak levels.
Deliveries are constrained: replacement costs are about 20% above market rents, contributing to the lowest completions since 2018.
Most new deliveries are mid-size (100,000–300,000 SF), driving scarcity for large-format buildings and increasing built-to-suit activity.
Prologis expects fewer options and stable-to-rising rents in most locations through 2026, so leasing urgency is advised—especially for occupiers needing big-box space.

Context and relevance

This report matters if you lease, develop, invest in or occupy logistics space. It ties together macro forces—trade-policy shifts, sustained consumer and business spending, and structural supply-chain changes like e-commerce growth—with real-estate outcomes: rising net absorption, tighter supply, and rent stabilisation.

For investors and developers it flags where scarcity and replacement-cost dynamics could support rents and valuations. For occupiers and 3PLs it signals that waiting for lower rents may be risky if you need large, high-quality space in 2026. Built-to-suit and earlier commitments are increasingly common responses to limited big-box availability.

Why should I read this?

Short answer: because if you deal with warehouses, distribution networks or logistics property decisions, this is the cheat-sheet you need. It explains why the market swung from wait-and-see to action in H2 2025, why big spaces are getting scarce, and why you might want to stop postponing that lease or site decision. Quick, practical and directly relevant.

Author style

Punchy: Prologis’ findings are a wake-up call. If you’re an occupier, investor or developer, this isn’t background noise—it’s a market signal to act. The report crystallises a real inflection: demand is firming, supply is tightening and rents are stabilising. Read the detail if you want to understand where to prioritise capital and leasing moves in 2026.