Competition intensifies for logistics space

The restructuring of logistics networks in response to growing e-commerce, demand for last-mile fulfillment and pressures to increase efficiency is continuing to spur rising levels of occupier and investor demand.




United States
Vacancy at record
low

Sustained net absorption
Expanding pipeline
Rising preleasing rates

Europe
Development reaches
new peak

Falling vacancy
Upward pressure on rents
Rise of 'city logistics'

Asia Pacific
3PLs & ecommerce
drive demand

Particularly active in Tokyo
Strongest rental increase
in Sydney




U.S. industrial vacancy reaches 17-year low

Responding to healthy consumer spending and growing e-commerce sales, absorption of space in the U.S. continues to outpace new deliveries. The national vacancy has declined to 5.3% and now stands at a new cyclical low.

Although the construction pipeline continues to grow, pre-leasing rates for speculatively-built buildings have risen, a sign of continued healthy demand. As companies continue to absorb new supply competition for the most optimal space remains fierce.




Strong development activity needed to fulfil demand in Europe

Europe has recorded another quarter of robust occupier activity and the majority of markets are anticipated to record rental increases throughout 2017.

While total development activity reached a new peak at the start of 2017 the majority of new supply remains firmly build-to-suit driven and the European vacancy rate will edge down further to reach around 5% by the end of the year.

Low levels of supply particularly in and around major cities could lead to a rising supply-demand imbalance and we predict growing intensification of land usage around the largest European cities, in particular London and Paris.




Activity stems from third-party logistics and e-commerce firms in Asia Pacific

Strong demand from e-commerce retailers and third-party logistics companies continues in several Asia Pacific markets, including Tokyo and Sydney.

Average rents across the region are flat. Sydney is showing the strongest rise, while rents are falling in Hong Kong.


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