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Prologis Research is seeing warehouse automation expand in tandem with, rather than instead of, logistics real estate demand. Five years after the company forecast a rise in automation to drive building efficiency, adoption has grown, but it has not diminished the need for physical space.
A recent Prologis analysis concludes that automation is evolving alongside logistics footprints, with technology helping tenants unlock revenue growth and address operational bottlenecks. Melinda McLaughlin, senior vice president and global head of research at Prologis, noted that the sector still has a long runway for adoption as technologies become more accessible and practical across a wider range of facilities.
McLaughlin told Connect CRE that users are turning to automation to increase speed, accuracy and throughput, not to shrink their space requirements. She emphasized that technology should be viewed as a complement to warehouse real estate rather than a strategy for space reduction.
The Prologis write-up outlines several categories of warehouse automation now in use. Fixed automated storage and retrieval systems use equipment such as cranes, shuttles, lifts or cubes, integrated with software to manage storage, retrieval and internal material movement. These systems typically align with higher-clear-height buildings and specific attributes such as flat floors, column spacing and mezzanines.
Automated guided vehicles and autonomous mobile robots take on repetitive tasks, including moving goods between storage, picking and packing areas. McLaughlin said these systems help cut travel time and improve throughput within the four walls. They are commonly deployed in facilities with mid- to higher-range clear heights, flat floors, mezzanines and suitable column spacing.
Conveyance and sortation technologies focus on productivity, speed, safety and efficiency, with more flexible building requirements. They enable high volumes of cartons or parcels to move consistently through a facility while improving routing accuracy. Piece-handling and picking solutions, often using robotic arms to palletize, unload and fill cartons, also tend to be compatible with a broader range of warehouse specifications.
Labor shortages, more complex supply chains and demand for faster throughput are key drivers behind automation investments, according to the report. Benefits can include improved service levels, network expansion and additional value creation for both users and owners.
McLaughlin also cited the challenges. Barriers to implementation often center on cost, flexibility and building readiness. Fully automated systems can require significant up-front capital, may be less adaptable if operational needs change, and sometimes need specialized facilities, leaving many existing buildings incompatible.
To address these hurdles, Prologis advocates a phased approach that begins with modular or partial automation. McLaughlin said such strategies can temper capital spending and reduce the workforce required for eventual full-scale automation, while allowing users to test and refine solutions in place.
From a real estate standpoint, McLaughlin observed that tenants are gravitating toward modular automation that can be integrated into current facilities. She added that the warehouse sector is shifting toward adaptable, tech-enabled buildings that alleviate labor and throughput constraints while supporting long-term network growth, making automation and logistics real estate increasingly interdependent.
The post Warehouse Automation Adoption Boosts Demand for Logistics Real Estate, Says Prologis Research appeared first on CRE Market Beat.
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