Savills' Global Warehousing Costs 2024 report reveals that Prague is the only European city where the total costs associated with operating premium industrial properties decreased year-over-year, by 1.8%.
In contrast, neighbouring Polish cities saw significant increases: Wroclaw (5.7%), Warsaw (5.8%), Katowice (8.7%), and Poznan (11.2%).
The analysis considers headline rent, local taxes, and service charges (excluding tenant-consumed utilities). While Prague (€99/m2/year) and Warsaw (€97.86/m2/year), have similar total warehouse rental costs, Prague's year-over-year cost decrease is primarily due to a correction in rental levels from their 2023 peak. In Warsaw, property tax increases have impacted some industrial parks and their tenants.
Ondrej Mícek, head of Industrial at Savills, commented: ‘When looking for a suitable location for the long-term lease of premium industrial spaces, several factors need to be considered. In addition to transport accessibility, the stable legislation, the technical specifications of the hall, or the size of the unit, the costs play a crucial role. Our report shows that additional service charges or taxes in a given location can increase the rental cost by 5 to 11% annually, as is the case in Poland.’
The UK dominates the list of the most expensive locations for premium warehouse space in Europe, occupying the top four spots. London leads the way at €446/m2/year, followed by the Midlands (€220/m2/year), the North West of England (€198/m2/year), and Yorkshire (€182/m2/year).
In Germany, rental prices, including taxes and service charges, range from €105/m2/year in Frankfurt to €110/m2/year in Hamburg.
Paul Tostevin, head of Savills World Research, added: ‘Warehousing has recently benefitted from a booming logistics industry and the global diversification of manufacturing, fuelling significant rises in property-associated costs, but we’re now seeing growth slow as higher supply and more moderate demand is helping to rebalance many markets. Big macro trends such as reorientating supply chains and rising e-commerce rates aren’t going away, however, so we expect to see further movement in costs in key locations in the coming years.’
