London is the most expensive warehouse market globally, with prime space costing €114.8 per m2, including rent, service charges and taxes.
According to an update to Savills’ 2022 Impacts programme, heightened demand for industrial and logistics space in the wake of the pandemic led to an 8.4% growth of the average cost of warehouse property between June 2021 and June 2022 in 52 global markets.
Land constraints in cities where warehousing competes with other asset classes and supply is limited are keeping vacancy rates for prime space below 3%.
Paul Tostevin, director in Savills World Research team, commented: ‘Changing consumer behaviour, the e-commerce boom and shifting supply chains, resulting in a lack of space and rental growth in many highly constrained markets, have driven the global warehousing market to new heights. Weakening consumer sentiment and higher energy and labour costs have not yet impacted demand or rents, and given the lack of grade A supply in many markets, costs are likely to remain high for the best located space. This will also be supported by further demand for the most highly rated sustainable buildings as retailers look to ‘green’ their supply chains.’
Market space in Europe increased by 6.7% on average, although warehousing costs in Prague rose 35.8% on an annual basis due to exceptionally low vacancy rates and the cities role as a nearshoring hub for many European companies.
Globally, labor expenses have increased by an average of 6%, while costs for energy and diesel have increased by 39.4%, according to Savills.
