Global logistics markets maintain robust activity

Global logistics markets maintained last year’s robust levels of activity during the first quarter, with strong take-up and pre-leasing holding vacancy stable at near-record lows despite increasing supply pipelines. With a growing emphasis on last-mile delivery, logistics companies are reviewing their supply chains and boosting demand for urban infill and multi-storey properties.





Stability in U.S. industrial market

The U.S. industrial market has maintained the momentum seen in 2018 and its overall vacancy rate hovers near all-time historic lows. As top logistics markets continue to operate at a sub–3.0% vacancy rate, we expect competition for quality space to add pressure on rents through the remainder of the year, and market conditions will continue to broadly favour landlords. For now, 2019 is projected to be another positive year for the logistics real estate market, although for the first time we anticipate a slowdown in its growth trajectory.




Further strong demand in European logistics market

Following five years in which the take-up of logistics space across Europe posted double-digit percentage growth, the deceleration in the rate of growth suggests that the market may be entering a phase of stabilisation. With modest economic growth forecasts across much of Europe, medium-term occupier demand will be driven by structural changes in supply chains as businesses strive to reduce costs and improve customer service, including by operating from new or more efficient facilities. We expect this to support continued robust levels of take-up throughout 2019, broadly in line with the record level posted in 2018.




Low vacancy supports rising rents in Asia Pacific

Manufacturers and 3PL firms comprised a significant portion of demand in the first quarter across Asia Pacific. Demand was robust in Tokyo, with labour market shortages supporting the movement towards more technologically integrated industrial facilities. Most Asia Pacific markets recorded an uplift in overall supply during the quarter, although aggregate vacancy is still low and continued to fall in Beijing, Shanghai and Singapore. Rents continued to rise across the region, albeit at a more moderate pace in markets such as Beijing and Hong Kong.


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