Press releases are provided by companies as is and have not been edited or checked for accuracy. Any queries should be directed to the company issuing the release.
July 12, 2018

CBRE Finds Increases In Prime Logistics Rents Have Accelerated Globally Amid Growth Of E-commerce

In The Americas, Coastal Markets Including Vancouver, Oakland, Seattle, New Jersey Led 3.8% Rise In Prime Logistics Rents

Los Angeles - July 12, 2018 - Prime logistics rents increased globally in the year ending March 31, accelerating their growth in many markets, due to strengthening economies around the world and greater demand for distribution of goods bought both online and in stores, according to a new report from CBRE.

Prime logistics rents - which are the highest achievable lease rates for top-quality warehouse and distribution-center space - increased by 3.2 percent across the globe in this year's first quarter from a year earlier, according to CBRE. That exceeds the previous 12-month period's 2.2 percent global increase.

Of the 10 global logistics hubs registering the largest gains in prime logistics rents in the year ending March 31, four are in the Americas. The biggest gainer globally was Vancouver, which posted a 29.1 percent increase due to its lack of land available for industrial development amid its growth as Canada's largest port. U.S. cities ranked in the top 10 are Oakland (14 percent increase), Seattle (13.4 percent gain) and New Jersey (up 9.5 percent).

Rounding out the top 10 are five EMEA hubs (Budapest, London, Tilburg/Eindhoven, Paris and Manchester/Liverpool) and one Asian city (Beijing).

Prime logistics rents offer a means of gauging the strength and momentum of the high end of warehouse markets across the globe. That the growth of prime logistics rents has accelerated globally bodes well for the industry's continued momentum.

"This is a positive indicator that we're still seeing global growth roughly six years after the U.S. market for Industrial & Logistics real estate began its recovery from the recession," said David Egan, CBRE's Global Head of Industrial & Logistics Research. "This underscores the theory that e-commerce-driven demand for logistics facilities has created a fundamental shift in this market, establishing new baselines for occupancy, rents and other measures."

Regionally, EMEA posted a 4.3 percent gain in prime logistics rents, outpacing those of the Americas and Asia as well as its own 1.2 percent gain from the previous 12-month period. Much of EMEA's increase can be attributed to improving economies in that region and resulting gains in consumption.

The Americas registered a 3.8 percent gain, on-par with its increase of the previous year. And Asia notched a 2.2 percent gain, surpassing its 1.4 percent advance from the earlier 12-month period.

Asian markets accounted for six of the 10 most expensive prime logistics markets, led by Hong Kong at a rate of $30.99 per sq. ft. per year. Three EMEA markets made that list (London, Stockholm and Munich). The only Americas market to land among the 10 most expensive was Oakland at $9.96 per sq. ft. per year.

CBRE examined rents in 71 global logistics hubs for its report. The company defines prime logistics rents as the highest achievable rent for industrial distribution space of the highest quality and specification in the best location within each market.

In the U.S., prime logistics rents increased by an average of 4.8 percent in the year ended March 31, propelled by gains in coastal markets.

"The three U.S. markets with the biggest increases in prime logistics rents - Oakland, Seattle and New Jersey - each are near busy seaports but have little land available for industrial development," said Adam Mullen, CBRE Americas Leader of Industrial & Logistics. "Other Americas markets within the top 25 gainers also are tied to busy seaports, including California's Inland Empire, South Florida, Houston, Los Angeles and Montreal."

More information: https://researchgateway.cbre.com/Layouts/PublicReportAccess/Default.aspx?PUBID=ec1143c7-c91d-4ba9-a772-aed82f22df2b

Submit your logistics-, material handling- or supply chain-related company news for publication in DC VELOCITY's Industry Pressroom section