Prime logistics rents increased globally in the year ending March 31, 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. New Jersey saw prime logistics rents, which are the highest achievable lease rates for top-quality warehouse and distribution center space, increase by an impressive 9.5 percent.
Of the 10 global logistics hubs registering the largest gains in prime logistics rents, four are in the Americas. U.S. cities ranked in the top 10 are Oakland (14 percent increase), Seattle (13.4 percent gain) and New Jersey (9.5 percent increase).
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.
“New Jersey continued to experience tightening supply and strong demand from industrial users, resulting in a robust increase in prime logistics rents,” said Thomas Monahan, Vice Chairman, CBRE. “With home to one of the country’s busiest seaports, and one of the most populous regions in the United States, New Jersey is well positioned to see logistics rents climb to new record highs.”
Regionally, Europe, the Middle East and Africa (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.
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