Logistics real estate demand is on the rise, with key metrics like net absorption and new lease signings improving in the third quarter, according to a report from Prologis. Industrial Business Indicator Activity Index slowed to an average reading of 53 in the third quarter.

Customer demand is increasing, despite some indicators still recovering from earlier inventory pull forward. Warehouse space utilization improved but remains lower than in the second quarter. Upstream companies front-loaded goods, leading to higher utilization rates.

Net absorption was 47 million square feet in the period, 64% higher than the second quarter. New lease signings increased by 10% in both the second and third quarters. Recent leasing activity favored large customers in sectors like food and beverage, e-commerce, and healthcare.

Market rents declined just 1% in the quarter. Scarcity is emerging in certain markets and size categories, while speculations remain below pre-pandemic levels. Prologis reported consolidated revenue of $2.21 billion for the third quarter, with an optimistic outlook for the future.

Outgoing CEO Hamid Moghadam expressed strong optimism about the market’s future potential, predicting much higher rents when the market stabilizes. Moghadam estimated rents could reset as high as 40% above current rates.

Read more at Yahoo Finance: Prologis says Q3 marked ‘inflection’ for logistics real estate market