E-commerce is disrupting commercial real estate demand: here’s what you need know

As foot traffic in malls and shopping centers decreases and e-commerce grows faster than ever, the real estate demands of retail are radically changing. Shopping behaviors move online, and existing retail spaces may be retrofitted or repurposed to align with customer expectations. 

E-commerce penetration overshot during COVID, however, projections widely agree that e-commerce will continue to grow in the next five to ten years. While 2023-4 saw a plateau in demand for third-party logistics providers (3PL) and warehousing real estate, as the tides turn 2025 will be an occupier’s market in Europe and other regions as demand rises. Ansarada’s 2025 Global Real Estate Outlook Report found 88% of commercial real estate investors expecting revenue growth in 2025.

 

Why and how e-commerce is changing real estate M&A 

Even in periods of uncertainty, such as the immediate aftermath of the Global Financial Crisis in 2008, commercial real estate properties have continued to perform compared to other asset classes when held for five years (JLL 2025 Global Real Estate Outlook).

However, investing in line with changing market conditions is key to realizing value. In 2025, there could be an early-mover advantage in sustainable warehousing and logistics facilities for e-commerce — here’s what to know. 

Gen Z prefers online shopping and has buying power

Gen Z now makes up 40% of global consumers and spends more per capita than any other generation at the same age, with a predicted spending power of $12 trillion USD by 2030. Over half of this demographic prefers to shop online rather than in-store, favoring online marketplaces and same-day delivery. 

The moment when Gen Z spending overtakes Boomer consumption varies by region, with Gen Z spending overtaking Boomers globally by 2029. 

E-commerce requires more warehouse space

According to CBRE research in Q4 of 2020, every $1 billion in online retail sales requires around 1.25 million square feet of distribution warehouse space. Adding to this, easy online returns require reverse logistics that take up 20% more space and labor than forward logistics. 

Online sales have grown three times faster than brick-and-mortar over the past decade. It’s predicted that e-commerce will make up 25% of all retail sales by 2028. Strategically located, high-quality logistics and e-commerce facilities will attract premium prices as companies vie to future-proof supply chains and meet updated sustainability expectations. 

Supply continues to lag in the US and Europe

New commercial real estate building activity slowed in past years due to high construction costs, financing costs and labor market constraints in the US and Europe.

In Europe, Canada and other regions, supply and demand varies by region. Knowledge of the local market is key in commercial and logistics real estate for 2025. 

Last-mile delivery determines prime locations

The desire for same-day delivery and competition to get products into consumers’ hands fast continues to drive investment in distribution complexes in prime locations. Vacant malls may be repurposed as warehouse and fulfillment centers with minimal renovation as existing dock doors and clear heights are compatible with warehouse use. 

Flight to quality and sustainability

As more options become available, occupiers are more selective about warehousing and building selection. Many e-commerce operations are looking to future-proof their supply chains, with strategies to meet future demand and sustainability requirements. Warehousing with specifications that fit current demand and meet quality and sustainability expectations is desirable.   

Demand for sustainable warehouses will grow as ESG compliance requirements are mandated, and the flight-to-quality trend observed in 2024 continues. 

Near-shoring favored amidst supply chain disruption

Political uncertainty, military activity, and evolving trade policies make near-shoring more attractive in regions affected by the Red Sea crisis in 2023 and other global conflicts and tensions. Already favored in regions like Mexico and Vietnam, in 2025 near-shoring could become a more important strategy in Europe (CBRE 2025 Real Estate Outlook). 

CSRD and sustainability compliance in force in EU

In Europe, sustainability reporting and climate transition plans must be delivered for the 24/25 financial year by around 50,000 EU enterprises (representing around 75% of total turnover). Basel IV reforms began in January 2025, introducing changes to credit risk management to capture climate-related financial risks. This may limit capital for commercial real estate. 

Existing retail stores offer unique experiences

Brick-and-mortar stores now compete with online retail and so must offer a compelling in-store experience to draw customers. Shop fit-outs may require modern renovations, customized lighting, or be located near office districts, co-working spaces or other multi-use public spaces to retain relevance. 

Costs associated with last-mile logistics and regional cultural preference for shopping and digital adoption create variations in preferences for brick-and-mortar retail, particularly in Europe’s M&A real estate market. As such, the impact of e-commerce on retail varies across regions. 

Retail rents have become more affordable in many regions as costs re-align with market conditions and vacancies return to pre-pandemic rates (CBRE February 2025). 

Where to invest for early-mover advantage in 2025

Nearshoring is expected to boost momentum in logistics and industrial real estate, especially in the US, as demand for warehousing and distribution facilities grows. As the cost of capital for industrial real estate moderates.

Discounts on some assets of 15-25% continue to enter the market as property holders seek liquidity at loan expiration. Between 2020 and 2023, 3PL and retailers over-stretched in many regions in order to meet rapidly expanding e-commerce demands. Now demand has slowed, with some looking to decrease capacity. These may present opportunities for those with dry power to capitalize. 

Be prepared to move quickly with Ansarada’s end-to-end due diligence and deals solution

In a fast-moving market, preparation can provide a competitive edge that can help your team secure an advantageous deal. Whether it’s acquiring, selling or investing, Ansarada’s deals platform will set you up for success. 

An in-built comprehensive checklist ensures everything is in place, making it easy to surface red flags or green ones during commercial real estate due diligence. Trusted by industry leaders around the world, our platform makes transacting smoother with secure online sharing, collaboration, and granular access control. 

Questions about real estate for e-commerce

What is a key characteristic of a ‘last-mile’ industrial property?

Last-mile industrial properties have close proximity to urban centers and densely populated areas to facilitate efficient and quick delivery of e-commerce products to consumers. The ‘last mile’ is the final distance a product travels from a logistics facility to the end user and is often the most expensive journey in the supply chain. 

What is M&A in real estate?

In a real estate M&A deal, the target’s portfolio includes real estate assets that are transferred as part of the deal to buy the company or combine the companies. For example, a real estate development company may combine with a construction company to streamline operations, or a real estate investment trust (REIT) may acquire another REIT to expand its holdings. 

More on real estate M&A

• Real Estate M&A in the Americas: a region of divergence (2025)
• Real Estate M&A: Analyzing the shifting market dynamics and future projections for the real estate sector (2025)
• Digital and AI tools realize neutral or positive returns for decarbonization of real estate portfolios (2025)