GLOBAL - London's Heathrow airport has the most expensive warehouse market in the world, followed by Tokyo, Oslo, Dublin and Singapore, according to Boston-based global real estate firm Colliers International.

The revelation adds to the misery the industrial property sector has been suffering around Europe, as Colliers' research found there was a noticeable slowdown in the first half of 2008 with the Eurozone as well as the UK posting very sluggish growth.

But it may not all bad news for pension funds willing to take a risk with their real estate property portfolios, according to Colliers.

While the major developed markets, such as the UK, The Netherlands, Spain, Belgium and the Nordic region, are expecting higher yields and thus lower prices in the coming months in their industrial property sectors, Colliers has suggested the rest of the Europe, Middle East and Africa (EMEA) region are displaying solid fundamentals that should ensure yields remain steady or even decline.

Further afield, warehouse markets in North America were also sluggish in the first half of 2008, though some areas of Canada bucked the trend with positive results, Colliers claimed.

Ross J. Moore, executive vice president of market and economic research at the firm remains hopeful, however, that rents will remain stable.

"As the US economy continues to cool, leasing activity is expected to show a further decrease as the effects of a depressed housing market filter through the general economy," said Moore.

"Reflecting relatively sound fundamentals, however, most North American markets should see rents either hold steady or decrease just marginally in the coming months," he said.

According to Colliers, the Asia Pacific region is doing better and remained the growth leader in the first half of 2008 with the behemoths of China and India at the region's helm.

Moore does not expect to see this pattern change for the rest of 2008 or 2009, despite the global slowdown beginning to filter through to area.

"Port cities remain very active as intra-region trade remains relatively robust," Moore continued.

"Warehouse rents in the region vary significantly with Japan, Hong Kong, South Korea and Singapore all posting strong lease rates while land prices in some areas, notably Hong Kong, Seoul and Tokyo are the world's highest," he explained.