London remains world’s second-most expensive logistics market: CBRE

London has maintained its position as the world’s second-most expensive market for distribution/logistics centres after Tokyo, according to a new report from CB Richard Ellis.

CBRE’s analysis covers 55 of the leading industrial and logistics markets across the world. It shows that Tokyo continues to be the most expensive industrial market with an average rent of $22.15 (EUR 10.5)/sq ft. Despite contracting slightly during Q1 2011, London continues to hold second position ($20.04/sq ft), while Singapore ($14.04/sq ft) has surpassed Sao Paulo, Brazil (US$12.88/sq ft) as the third most expensive location.

According to CBRE’s Global Industrial Rent Index, rental growth has been better than anticipated, with the index rising 1.3% during Q1 2011 – the largest quarterly growth since Q2 2007. In the year to Q1 2011, rents grew by 2.1%.

CBRE’s research shows that expansion strategies and retailer demand are helping to underpin industrial rental growth to some extent, particularly in the Asian markets, as is world trade growth, which is back to pre-crisis levels. However, the main driver of growth has been the lack of suitable properties in most regions and this is expected to continue to drive global prime rents upwards throughout 2011.