Logistics markets continue to surge ahead

Strong momentum in global logistics markets was maintained during the third quarter of 2017 as robust demand outpaced new supply, putting upward pressure on rents.

U.S. industrial rents reach all-time high

Spurred by an increase in absorption and persistently low market vacancy, U.S. industrial rents inched up further over the third quarter, reaching US$5.40 per square foot, an all-time high. On an annualised basis, rents increased by 5.3%. Going forward, we expect asking rents for industrial space to face continuous upward pressure due to a lack of available inventory and continued strong leasing demand.

European warehousing markets on path for a new record-setting level in 2017

JLL's latest Supply Chain Activity Index has maintained its upward trajectory, supporting predictions that 2017 will end with total take-up in excess of last year’s record level.

The European vacancy rate has edged further down in Q3 and by year-end is forecast to fall to around 5%, marking a new cyclical low. Despite slowing supply levels, prime rents were largely flat across the region in the quarter and rental growth potential in the final quarter of 2017 is limited to only a few markets. However, growth should accelerate in 2018 with an expanding number of European markets likely to see rental increases.

3PLs and e-commerce firms drive demand for logistics space in Asia Pacific

Third-party logistics and e-commerce firms remained the primary demand driver in Asia Pacific in the third quarter. The recent uplift in economic and trade performance helped to support the leasing of logistics space in Singapore. The Sydney and Melbourne markets saw elevated pre-leasing volumes, and demand from retail and e-commerce related users has buoyed occupier activity.

Rents edged up further in most markets across the region in Q3. Melbourne rents continued to demonstrate strong growth, while non-bonded rents in Beijing and Shanghai edged up on landlords’ stronger bargaining power in prime locations amid tight vacancy.

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