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The annual cost of occupying prime logistics space in Singapore stands at over US$200 (S$254) per sq m – the fourth highest in the world, according to DTZ Global Logistics Landscape report.
In comparison, the priciest of such premises are in London, where it is nearly US$350 (S$445) per sq m, followed by Hong Kong at about US$300 (S$382) per sq m, and Zurich at nearly US$250 (S$318) per sq m.
However, based on the forecasted total increase in annual costs for 2014 to 2018, Singapore will likely see the 2nd largest increase of nearly US$40 (S$51) per sq m, trailing Hong Kong with nearly US$50 (S$64) per sq m. Completing the top five are Dublin over US$30 (S$38) per sq m, followed by London at over US$20 (S$31) per sq m.
In particular, approximately 1.5 million sq m of warehouse space is expected to be completed in Singapore between 2014 and 2016, which is equivalent to 19 percent of the current logistics stock. On an annual average basis, this upcoming supply exceeds the annual average demand of 200,000 sq m for 2011 to 2013.
“Occupiers in Asia Pacific will continue to face the highest occupancy cost increases. We forecast an average annual uplift of 2.4 percent to 2018. Hong Kong and Singapore will post the biggest challenge in terms of cost growth, exceeding 3 percent per annum,” said Richard Yorke, Global Head of Occupier Research at DTZ.
“Meanwhile, occupiers in Europe will benefit from the lowest cost increases. Landlords in the US are starting to get the upper-hand as demand for warehouse space grows. This will translate into cost increases which will surpass the US inflation level,” he added.
The Global Logistics Landscape report looked into the cost of occupying prime logistics space in 89 global markets.
Nikki De Guzman, Editor at CommercialGuru, edited this story. To contact her about this and other stories, email nikki@propertyguru.com.sg
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