AMB releases new industrial research

Tuesday, November 3rd, 2009

SAN FRANCISCO - AMB Property Corp., a global owner, operator and developer of industrial real estate, released a research report titled, “Inside the Global Supply Chain: Production, Trade, Inventories and a New Demand Model for Industrial Real Estate.”

The company’s new demand model illustrates the movement of goods and quantifies the magnitude and direction of these key variables with the demand for industrial real estate. This report is a resource for those who want to examine these relationships as we emerge from an unprecedented global financial and real estate crisis relative to historic behavior and correlations.

Detailed findings in the report include:

- Production, trade and inventories have fallen to unsustainably low levels. From their peak, they have declined by double digits, while consumption has decreased by just 1.9%. Production and trade must rebound in order to restock inventories and to meet even baseline demand for goods.

- Production and trade are in fact rebounding globally. The major economies have exhibited positive growth trends in trade and industrial production in recent months. These trends are precursors to sustained inventory growth and increased industrial real estate demand.

- Consensus trade forecasts imply 2010 U.S. net absorption of more than 100 msf and 500 msf globally - a complete turnaround following negative absorption of 225 msf through the first three quarters of 2009.

“By studying the interaction of trade with production and inventory levels, we believe our model provides greater accuracy into the turning points and forecasts the demand for industrial space,” said David Twist, AMB’s vice president, research.

“We believe these indicators will need to rebound as there is no evidence that the structural relationship has changed, trade continues to serve as a means of raising productivity and lowering overall costs.”

A copy of AMB’s research report can be downloaded from the company’s Web site at www.amb.com/global_capabilities/research.html.