Search
 

AMB Underscores Trade-Industrial Real Estate Link

Researchers say trade variation accounts for 80% of variation in US industrial real estate demand. Report sees recovery beginning in 2010.

By John McCloud | Updated on June 17, 2009

SAN FRANCISCO- Variations in trade account for 80% of the historical variation in US industrial real estate demand, say researchers from AMB Property Corp. According to the industrial REIT’s new research report The Long-Term Prospects for Global Trade and Industrial Real Estate Demand: An analysis of a trade-based investment strategy in the midst of global economic crisis , the dependence on trade ultimately provides underlying stability to the market. The report predicts the beginning of recovery in 2010.

“Our analysis indicates that, while the global economy is in the midst of a recession, the fundamental drivers of industrial real estate demand remain intact,” says AMB vice president, research David C. Twist. “The recent declines in global trade volumes and the net absorption of industrial real estate…represent a temporary pause in a strong, longstanding secular trend. Today’s interconnected, highly-efficient supply chains are not reversing in any meaningful way, and, on the margin, there are early signs that trade volumes may be stabilizing.”

According to AMB, growth in trade volume correlates strongly with both US and global GDP. Furthermore, it says trade growth as a multiple of GDP growth rate has more than doubled over the last 50 years. In the past decade alone, trade’s multiplier on GDP expanded to 3.5. As a result, nominal changes in GDP growth result in significant changes in trade growth, explaining why trade has fallen so precipitously over the past year, with forecasts predicting a 9% to 11% in global trade for ’09.

Want to continue reading?
Become a Free ALM Digital Reader.

Once you are an ALM digital member, you’ll receive:

  • Unlimited access to GlobeSt and other free ALM publications
  • Access to 15 years of GlobeSt archives
  • Your choice of GlobeSt digital newsletters and over 70 others from popular sister publications
  • 1 free article* every 30 days across the ALM subscription network
  • Exclusive discounts on ALM events and publications

*May exclude premium content
Already have an account?

NOT FOR REPRINT

© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.

GlobeSt

Join GlobeSt

Don't miss crucial news and insights you need to make informed commercial real estate decisions. Join GlobeSt.com now!

  • Free unlimited access to GlobeSt.com's trusted and independent team of experts who provide commercial real estate owners, investors, developers, brokers and finance professionals with comprehensive coverage, analysis and best practices necessary to innovate and build business.
  • Exclusive discounts on ALM and GlobeSt events.
  • Access to other award-winning ALM websites including ThinkAdvisor.com and Law.com.

Already have an account? Sign In Now
Join GlobeSt

Copyright © 2024 ALM Global, LLC. All Rights Reserved.