Global Industrial Real Estate Market 2025 – 2034

Reports Description

Global Industrial Real Estate Market size was valued at USD 13.3 Billion in 2025, and the market revenue is expected to grow at a CAGR of 4.11% over the forecast period, reaching nearly USD 22.7 Billion by 2034.

Industrial Real Estate Market Overview

The industrial real estate market is anticipated to experience development in the future due to the increasing construction. The tangible development of buildings, infrastructure, and other structures is a component of construction activities.

Accelerated urbanization, infrastructure development, and an emphasis on efficiency and accuracy in construction projects are the primary factors contributing to the rise in construction and real estate activities.

Industrial real estate facilitates the construction process from planning to completion by providing the requisite infrastructure, facilities, and logistical support to expedite operations, enhance efficiency, and facilitate the process.

For example, the Office for National Statistics, a government department based in the United Kingdom, reported an £18,161 million ($19.96 million) increase in new construction activities in November 2023 compared to 2022.

Private sector projects experienced a 16.8% increase, while public sector projects increased by 13.1%. Consequently, the industrial real estate market is stimulated by the growing construction industry.

Industrial real estate pertains to commercial properties that are specifically designed for industrial purposes, including manufacturing, warehousing, distribution, research and development (R&D), and logistics.

Typically, these properties are equipped with heavy-duty flooring, expansive floor areas, high ceilings, loading platforms, and access to transportation infrastructure, all of which are specifically designed to support a variety of industrial processes.

Industrial, retail, office, and warehousing properties comprise the primary categories of industrial real estate. Retail real estate encompasses properties that are utilized for commercial purposes, including shopping centers, stores, and other retail venues.

Manufacturing, distribution, logistics, research and development, data centers, and other functions are all served by these properties, which are available in a variety of sizes, including small, medium, and large.

Industrial Real Estate Market Growth Factors

It is anticipated that the industrial real estate market will continue to expand as construction activities increase. The tangible development of buildings, infrastructure, and other structures is included in these activities. The increase in construction and real estate activities is a result of the emphasis on precision and efficiency in building projects, as well as accelerated urbanization and infrastructure development.

The infrastructure, facilities, and logistical support that industrial real estate provides are essential for the smooth operation, enhancement of efficiency, and facilitation of the construction process from planning to completion.

For example, Eurostat, a government agency based in Europe, reported that the average annual construction production in the EU and the euro area increased by 0.1% and 0.2%, respectively, in February 2024, in comparison to 2022.

Furthermore, the United States Census Bureau reported a 10.2 percent growth rate in the value of construction activities from $1,626.4 billion in 2021 to $1,792.9 billion in 2022 in December 2021. Consequently, the industrial real estate market experiences growth as a result of the escalating construction activities.

In order to expand their property portfolios, enhance logistics capabilities, and satisfy the increasing demand for contemporary industrial spaces, major players in the industrial real estate market are investing in real estate initiatives.

These investments demonstrate a strategic emphasis on the development of large-scale, sustainable industrial real estate properties in order to capitalize on the sector’s accelerated expansion. For example, in December 2023, Panattoni Development Company, an industrial real estate firm headquartered in the United States, made an investment of over USD 101.4 million (€100 million) in India to substantially increase its presence in the country.

The organization intends to allocate $100 million annually to India over several years to construct industrial warehouses in significant markets, including Delhi NCR, Mumbai, Bengaluru, Chennai, and Pune.

Industrial Real Estate Market Restraining Factors

Numerous factors can serve as either challenges or constraints for the Industrial Real Estate Market. These may encompass:

• Economic Uncertainty: The demand for industrial space may decrease as a result of businesses’ decisions to postpone or abandon development plans during recessions.

• High Initial and Continuous Expenses: The development and maintenance of industrial properties necessitate a substantial initial financial investment. This could potentially deter the entry of new competitors and impede the expansion of existing ones.

• Zoning and Regulatory Obstacles: The development of industrial real estate is restricted by stringent environmental and zoning regulations. Frequently, these restrictions lead to delays and increased expenses, as they can be challenging and time-consuming to navigate.

• Location Restrictions: Industrial properties must be situated in ideal locations that are in close proximity to markets, labor pools, and transportation networks. It can be challenging to identify suitable locations that meet all of these criteria, particularly in densely populated or highly urbanized areas.

• Technological Progressions: The swift advancement of technology may render obsolete older industrial facilities. This necessitates ongoing renovation and upgrading expenses, which can be expensive.

• Environmental Concerns: The environmental impact of industrial operations may be significant, potentially leading to community opposition and the implementation of more stringent regulations. This has the potential to increase development expenses and decrease the number of available spaces.

Industrial Real Estate Market Segmentation Analysis

By Property Type:

The Industrial Real Estate Market’s primary market segment is broadly classified by property type, and it encompasses a variety of specialized sub-segments that are specifically designed to accommodate the diverse requirements of industrial operations. Warehouses are crucial in this sector, as they serve as critical storage and distribution centers for products from a variety of industries.

Manufacturing facilities are essential, as they provide facilities that are equipped to produce a variety of products, including heavy industrial processes and light assembly. The versatility of Flex Spaces is evident in their ability to provide a single location with a combination of office, warehouse, and light manufacturing capabilities, making them an ideal choice for businesses that require adaptable environments.

Research and Development (R&D) Facilities are specialized buildings that are intended to promote innovation. They are frequently furnished with laboratories, clean rooms, and collaborative areas that are essential for the advancement of technology and the development of new products.

Industrial parks offer a comprehensive solution by providing multiple units in a single location, fostering synergy among businesses through shared infrastructure and services, and frequently attracting large-scale manufacturing and logistics enterprises.

Showrooms are the public face of industrial businesses, offering aesthetically pleasing spaces to showcase products directly to consumers or business partners. They frequently combine retail, office, and storage functions.

The Industrial Real Estate Market is a multifaceted and essential component of the broader real estate industry, as each sub-segment addresses the specific requirements of industrial enterprises, including logistics and manufacturing efficiency, as well as innovation and market presence.

By End User:

The Industrial Real Estate Market is segmented by end-user industry and includes a wide variety of facilities and applications that are specifically designed to satisfy the storage, manufacturing, and distribution requirements of different sectors.

The segment encompasses automotive facilities that are specifically designed for the manufacturing and assembly of vehicle components, as well as logistics and distribution centers, which are essential for the efficient storage and transportation of products.

Spaces for the production and storage of a diverse selection of personal and domestic products are included in consumer goods properties. To manage perishable products in controlled environments, the food and beverage sub-segment necessitates specialized facilities.

The demand for industrial real estate has increased as a result of the surge in e-commerce, which has mandated the construction of extensive warehouses and fulfillment centers to manage online orders and returns.

Secure, climate-controlled spaces are necessary for the management of sensitive medical supplies and equipment in pharmaceutical and healthcare facilities. Ensuring that delicate components are managed appropriately, the technology and electronics sub-segment accommodates high-tech manufacturing and storage requirements.

Ultimately, construction materials facilities are developed to accommodate the storage of weighty, bulky items such as lumber, steel, and cement, which require specialized infrastructure to facilitate access and support the weight. In general, these sub-segments showcase the multifaceted nature of industrial real estate, as each has its own set of unique requirements to facilitate the operations of its respective industry.

Each sub-sector contributes to the growth and dynamism of the Industrial Real Estate Market by reflecting the evolving requirements of global commerce and industry and broader economic trends.

By Size:

The Industrial Real Estate Market is a critical sector of the broader real estate industry, predominantly focused on properties that are intended for industrial purposes, including manufacturing, warehousing, and distribution. Properties can be classified into three primary sub-segments within this market: small-scale, medium-scale, and large-scale, based on their size.

Small-scale industrial properties are frequently employed by small businesses or ventures that necessitate adaptable spaces for light manufacturing, storage, or small-scale distribution. These properties typically consist of facilities that span up to 50,000 square feet.

These properties are essential for emerging enterprises because of their affordability and adaptability. Medium-scale industrial properties, which are used by mid-sized businesses that require more substantial space for operations such as assembly lines, bulk storage, and regional distribution centers, are situated within the 50,000 to 200,000 square foot range.

They are appealing to companies that are expanding but have not yet reached the enterprise level due to their ability to reconcile cost-efficiency and capacity.

Industrial properties that exceed 200,000 square feet are designed to accommodate substantial operations, including major distribution centers, extensive storage facilities, and large-scale manufacturing plants. The infrastructure of these properties is frequently advanced to accommodate significant logistical and operational requirements, and they are frequently designed for high-volume operations.

The demand for large-scale properties is typically driven by established corporations, national retailers, and logistics companies, which necessitate expansive space to optimize supply chain efficiencies and accommodate substantial production capacities.

The Industrial Real Estate Market’s overall dynamism and diversity are supported by the distinct requirements of businesses at varying phases of growth, which are addressed by each of these sub-segments.

Report Scope

Industrial Real Estate Market Regional Analysis

The Industrial Real Estate Market can be broadly segmented by geography, including North America, Europe, Asia-Pacific, Latin America, and the Middle East and Africa. Each region presents unique opportunities and challenges.

The mature and highly developed market of North America, particularly the United States and Canada, is characterized by a substantial demand for warehousing and distribution centers, which is driven by robust e-commerce growth and nearshoring trends.

Germany, the United Kingdom, and France are among the European countries that experience considerable activity due to their well-established infrastructure and regulatory frameworks. The demand for industrial and logistics spaces is bolstered by a robust manufacturing base.

The Asia-Pacific region, which is propelled by industrialization, urbanization, and thriving manufacturing sectors, is undergoing rapid development. Consequently, the demand for industrial real estate is on the rise. Powerhouses such as China, India, and Japan spearhead this region.

Latin America, which includes emerging economies such as Brazil and Mexico, is presenting an increasing number of investment opportunities as these nations strive to improve their industrial capacities and infrastructure developments.

In the interim, the Middle East and Africa, despite their relative youth, are gradually transforming as a result of a heightened emphasis on diversifying their economies beyond oil. This has resulted in investments in industrial centers such as the United Arab Emirates and South Africa.

Combined, these sub-segments represent the global industrial real estate landscape, which is characterized by varying levels of market maturity, economic fundamentals, and industrial activity. Each of these factors influences the demand and supply dynamics of industrial spaces.

Industrial Real Estate Market Recent Development

• Duke Realty Corporation was acquired by Prologis Inc., a US-based provider of logistics real estate solutions, for $23 billion in October 2022. The acquisition is intended to fortify Prologis’s position by increasing its portfolio, improving operational efficiency, and acquiring market share in critical geographical regions. Duke Realty Corporation, a real estate investment trust (REIT) headquartered in the United States, is a company that specializes in the development and administration of industrial and logistics properties.

List of the prominent players in the Industrial Real Estate Market:

• Prologis
• Goodman Group
• Duke Realty
• Liberty Property Trust
• Blackstone
• GLP
• Brookfield Asset Management
• CBRE Group
• JLL
• Cushman & Wakefield
• Prologis
• Goodman Group
• Duke Realty
• Liberty Property Trust
• Blackstone
• Others

The Industrial Real Estate Market is segmented as follows:

By Property Type

• Warehouses
• Manufacturing Facilities
• Flex Spaces
• Research and Development (R&D) Facilities
• Industrial Parks
• Showrooms

By End User Industry

• Logistics and Distribution
• Automotive
• Consumer Goods
• Food and Beverage
• E-commerce
• Pharmaceuticals and Healthcare
• Technology and Electronics
• Construction Materials

By Size

• Small-Scale
• Medium-Scale
• Large-Scale

Regional Coverage:

North America

• U.S.
• Canada
• Mexico
• Rest of North America

Europe

• Germany
• France
• U.K.
• Russia
• Italy
• Spain
• Netherlands
• Rest of Europe

Asia Pacific

• China
• Japan
• India
• New Zealand
• Australia
• South Korea
• Taiwan
• Rest of Asia Pacific

The Middle East & Africa

• Saudi Arabia
• UAE
• Egypt
• Kuwait
• South Africa
• Rest of the Middle East & Africa

Latin America

• Brazil
• Argentina
• Rest of Latin America