Prologis is trying to keep mum on regardless of whether the enterprise is in conversations with Amazon, the major tenant of its logistics services, to minimize section of the e-commerce giant’s huge footprint of leased warehouse house.
Due to the fact a bombshell report from Bloomberg final week that indicated Amazon strategies to sublease thousands and thousands of sq. feet of its suddenly overextended distribution network—and may possibly terminate some leases—Prologis has been directing all queries about Amazon’s plans back to the e-commerce giant.
“We have a policy of not commenting on behalf of our customers. I would immediate you to Amazon for those people inquiries,” Jennifer Nelson, head of corporate communications for Prologis, informed GlobeSt.
While deflecting a torrent of incoming queries about Amazon’s programs, Prologis also is using the prospect to broadcast a considerably bullish outlook about e-commerce profits development, which shrank to 2.4% in Q1, in accordance to the most up-to-date retail income figures released by the US Office of Commerce.
“E-commerce profits development will exceed its pre-pandemic trajectory, and we count on that e-commerce share will climb greater thanks to quicker deployment of identical-working day and future-day supply abilities, improved on line gross sales systems (e.g. augmented truth, metaverse purchasing) and continued investments in segments like furniture and groceries,” Prologis told Globe St.
The e-commerce share of US retail income surged from its pre-pandemic amount of about 10% to a mid-2020 peak of nearly 17% before leveling off for the duration of the past yr concerning 14% and 15%. According to DOC figures released very last week, the e-commerce share of US retail revenue for Q1 2022 was 14.3%.
Amazon, which doubled the dimensions of its distribution network during the pandemic, disclosed all through a Q1 earnings contact that it absorbed losses of practically $4B in the 1st quarter of this year—Amazon’s 1st quarterly losses due to the fact 2015—admitting that it now has a glut of warehouse room mainly because it overestimated the progress amount for e-commerce.
Citing nameless resources “familiar with the problem,” Bloomberg claimed past week that Amazon is considering subleasing at least 10M of its estimated 370M SF of leased warehouse house, and could vacate even additional of its gargantuan industrial footprint by ending some leases.
Amazon’s excessive storage capability contains warehouses in New York, New Jersey, Southern California—three of the tightest industrial markets in the US, just about every loaded to capacity—and Atlanta, Bloomberg described, incorporating that one of its resources explained the over-all volume of house Amazon requires to cull could full as a lot as 30M SF.
The Bloomberg report also indicated that Amazon may perhaps “hedge its bets” on its industrial space requires by giving sublease phrases of one or two many years so the e-commerce titan can re-occupy the industrial area promptly if online income surge all over again to pandemic concentrations.
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