Proximity to consumers and energy reliability reshape the global logistics real estate market

According to Prologis, while large-scale warehouses continue to play an important role in supply chains, companies are increasingly shifting towards decentralised fulfilment networks, with facilities located closer to major urban centres and areas with concentrated consumer demand.

The trend is reflected in a new survey conducted by Prologis in partnership with The Harris Poll, in which 91% of business executives said retailers and logistics providers urgently need more decentralised distribution networks to meet customer expectations.

The survey included more than 1,800 business leaders from the United States, the United Kingdom, Germany, India, China and Mexico.

Proximity to Consumers Becomes a Key Location Factor

The need for faster service is reshaping companies’ geographical strategies, as businesses seek to position their warehouses as close as possible to end consumers.

As Prologis CEO Dan Letter noted, the company is now focusing not only on high-growth markets and major population centres, but also on specific submarkets within individual cities that offer the best access to consumers.

This approach reflects a broader shift in the logistics real estate market: the value of a warehouse is no longer determined solely by its size and capacity, but increasingly by its location in relation to households and distribution networks.

The shift is also reflected in companies’ plans for their geographical footprint. According to the survey, the proportion of businesses intending to maintain their existing global footprint unchanged has fallen by 14 percentage points year-on-year, reaching 36%.

By contrast, companies are reassessing the location of their facilities, combining different diversification strategies with greater regional integration. More than half are simultaneously pursuing network diversification and a stronger regional presence, while approximately one in three is adopting nearshoring or reshoring strategies, relocating operations to neighbouring countries or back to their domestic markets.

Same-Day Delivery Gains Ground

Delivery speed is a central driver of these changes. Consumer expectations continue to rise, with businesses increasingly viewing same-day delivery as a key requirement for maintaining their competitive position.

Indeed, the proportion of companies offering same-day delivery services has doubled since 2019, while delivery speed is now emerging as a more significant competitive advantage than price, according to the survey findings.

This development is boosting demand for warehouse space in urban and suburban areas, where businesses can fulfil a greater number of orders within shorter timeframes. At the same time, it is increasing the importance of smaller, more flexible facilities that complement large central distribution warehouses.

Prologis’ strategy is also reflected in its portfolio management. As Dan Letter noted, although the company has a portfolio of approximately 1.3 billion sq ft, it has sold properties covering more than 200 million sq ft over the past 15 years.

According to Letter, these disposals involved assets that no longer aligned with the company’s long-term requirements or its customers’ evolving needs.

Energy Reliability Moves to the Forefront of Investment Decisions

Beyond proximity to consumers, another factor is becoming increasingly decisive in the selection of logistics facility locations: energy reliability. The availability and stability of electricity supply now rank first among the criteria influencing location decisions across the sector.

This trend is linked, among other factors, to the growing adoption of artificial intelligence technologies, which are increasing businesses’ energy requirements, as well as the gradual electrification of transport fleets.

Against this backdrop, companies expect owners and developers of industrial properties to take a more active role in developing or financing energy resilience infrastructure within their facilities. Slightly more than a quarter of the executives surveyed believe that property owners and developers should lead or finance such investments.

These infrastructure investments include solar power systems, energy storage facilities and electric vehicle charging stations.

Prologis has already expanded its activities in this area. According to its CEO, the company began systematically broadening its involvement in the energy sector approximately five years ago, subsequently establishing it as a distinct business segment.

Today, it has more than 1.4 GW of capacity from solar energy generation and storage operations, while also developing solutions to support the electrification of its customers’ transport fleets.

Artificial Intelligence Reshapes Warehouse Operations

The integration of artificial intelligence is also expected to bring significant changes to the logistics sector, emerging as a key tool for strengthening business competitiveness.

According to the survey, demand forecasting technologies and agentic AI systems are among the most transformative applications expected to reshape supply chain operations over the next three years.

More specifically, 75% of the executives surveyed plan to make significant investments in artificial intelligence systems for demand forecasting and inventory replenishment.

These applications can help companies better anticipate market requirements, optimise inventory levels and improve delivery planning. At the same time, they enhance businesses’ ability to respond more quickly to fluctuations in demand.