Prologis forecasts ‘moderate global rent growth’ in 2026

Core Insights - Prologis anticipates a new cycle beginning in 2026, with improved rental demand expected as trade headwinds diminish and corporations focus on long-term supply chain needs [1][2] Rental Trends - Global rents fell by 3.7% last year, with a 2.3% decline in the first half of the year, slowing to 1.4% in the second half, indicating a critical transition for various stakeholders [2] - In the U.S., rents decreased by 4.5% in 2025, with coastal markets experiencing a 7.6% decline, while Nashville, Houston, and Indianapolis emerged as the top-performing markets [3] Supply and Demand Dynamics - Global facility completions are projected to deliver 474 million square feet in 2026, the lowest since 2018, with U.S. completions expected to hit a decade low due to high construction costs and regulatory barriers [4] - Replacement costs are currently 20% above market rents, suggesting a market in the early growth phase, with demand from large companies for sizable facilities [5] Future Projections - Prologis forecasts net absorption of 200 million square feet in 2026, an increase from 155 million square feet last year, while new warehouse deliveries are expected to decrease to 180 million square feet [6] - The anticipated changes are expected to reduce vacancies from 7.4% to approximately 7.1% to 7.2%, exerting upward pressure on rents throughout the year [6]