Latin America commanded a 19% surge in logistics rents in 2023 easily surpassing neighbours US and Canada with 6% after their record 2022. But which European markets were the strongest performers?
Prologis’ proprietary Logistics Rent Index has found that in Europe rents grew by 7% with markets divided into four groups:
• Supply-constrained markets with healthy growth that benefit from structural trends (e.g., Germany and the Netherlands).
• Markets with traditionally modest growth that continued to grow at a defensive pace (e.g., France).
• High-cost markets where rents stabilized at high levels (e.g., London and Prague).
• Select markets where elevated deliveries drove an increase in concessions (e.g., Poland).
Two European markets made it into the Global Top 10: Munich is in sixth spot and South Netherlands in eighth for rental growth.
The top global performer was Guadalajara in Mexico. Rents surged 19% driven by ultra-low vacancy, rapidly rising replacement costs, and the emergence of nearshoring, a new secular driver.
Looking ahead, Prologis said Europe was likely to see a lower peak in the vacancy rate during the upcoming mini-cycle because new construction starts fell earlier than in the US, and other global markets.
‘Improvement in the demand backdrop could cause rent growth to reaccelerate quickly as scarcity returns to many markets on both the Continent and in the UK.’
Prologis' Top 10 Global Rent Growth Markets
1 Guadalajara
2 Washington DC
3 Tijuana
4 Central Florida
5 Mexico City
6 Munich
7 Juarez
8 South Netherlands
9 Phoenix
10 Monterrey
