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Singapore is behind London, which topped the list, Hong Kong, San Francisco, and Geneva.
Singapore has emerged as the world’s fifth most expensive logistics market, with rents at US$16.68 (S$22.20) per sq ft per year, revealed a Cushman & Wakefield report.
London topped the list, followed by Hong Kong, San Francisco Peninsula in the US and Geneva.
“The unprecedented disruption caused by COVID-19 pandemic and changing consumer behaviours has reshaped the future of the logistics industry by exposing global supply chain vulnerabilities and accelerating technological advances. As a result, a variety of global trends have emerged, propelling the sector forward in new ways,” said Jason Tolliver, Investor Lead, Logistics & Industrial Services, Americas at Cushman & Wakefield.
The report noted that the Asia Pacific industrial market has remained resilient, with 15 of the 34 key markets monitored by Cushman & Wakefield considered landlord-favourable, six are tenant favourable while the remaining 13 are neutral markets.
This is in stark contrast to the region’s office sector, which tends to lean towards a more tenant-friendly condition.
Cushman & Wakefield said the status quo has “largely been maintained year-to-date, with only Singapore showing any significant change to becoming more tenant-friendly, though this is restricted to certain parts of the industrial market”.
Over in North America, the industrial market registered growth despite the COVID-19 pandemic as well as other local disruptions such as wildfires and hurricanes.
“COVID-19-induced lockdowns did cause a slight slowdown in demand in the first half of the year compared to prior years. However, even this combined with the large volume of supply has still not been enough to fully satiate tenant demand and to allow vacancy rates to begin to rise significantly,” said Tolliver.
North American industrial vacancy hovered at 4.9% toward the end of 2020, just a 30 bps increase from 2019.
Europe’s logistics sector, on the other hand, struggled with supply constraints due to a lack of developable land as well as strict planning regimes.
With this, the vacancy rate at most of Europe’s key logistics hubs has been on the downtrend, at around 4% in Dutch and UK markets and about 2% in Netherland’s Rotterdam, Lyon in France, Prague (Czech Republic) and Budapest (Hungary).
“The global logistics sector not only showed resilience during the strict first half lockdowns, but went on to benefit from consumer and business reactions to the pandemic during second half,” said Dr. Dominic Brown, Global Head of Demographic Insights, APAC-lead for Cushman & Wakefield.
“Broadening e-commerce, both geographically and by product range, will be a key driver of new space demand over the next decade.”
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Victor Kang, Digital Content Specialist at PropertyGuru, edited this story. To contact him about this story, email: victorkang@propertyguru.com.sg
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