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2 September 2013 | Marino Donati
Demand from logistics operators has helped make London the most expensive real estate market in the world, after Tokyo in Japan.
According to global property advisor CBRE, fierce competition for modern facilities from expanding third-party logistics operators and rapidly growing online retailers is driving demand.
CBRE’s quarterly survey tracks the top 10 prime global logistics markets. It shows that Tokyo is the most expensive (US$20.02/£13 per square foot per annum) market, followed by London ($19.12/£12.3 per sq ft per annum) and Singapore ($17.13/£11 per sq ft per annum).
Prime rents in most European markets – including London, Paris, Stockholm, Moscow and Helsinki – were steady, despite a challenging economic environment, the study found.
London saw an increase in activity for units of 100,000 sq ft or larger. Retail occupiers, followed by third-party logistics operators, continue to be the most active users throughout the market, although a lack of supply held back take-up.
CBRE global chief economist Raymond Torto said: “Retailers continue to serve as a significant source for global logistics demand in many markets, including London, Tokyo, Singapore and Hong Kong.”
He added that the growth of e-commerce has also benefited cities such as Tokyo and Brisbane.
CBRE Logistics Prime Rent Ranking (all per square foot per annum)
1. Greater Tokyo - $20.02
2. London - $19.12
3. Singapore - $17.13
4. Helsinki - $16.58
5. Stockholm - $14.22
6. Hong Kong - $13.65
7. Moscow - $13.01
8. Brisbane – $10.92
9. Paris - $10.89
10. Perth - $10.33