global prime logistics rents may 2016

Demand Strong for Prime Logistics Space in Global Hubs

GLOBAL PRIME LOGISTICS RENTSMAY 2016

CBRE RESEARCH

2 © 2016 CBRE, Inc. CBRE Research | Global Prime Logistics Rents, May 2016

Supply chain transformation driving up prime logistics rentsDespite a tumultuous global economic climate in 2015, prime

logistics rents in global hub markets increased 2.8% year-over-

year amid growing demand—driven principally by the growth

of global supply chains and the expansion of consumption and

production into new locations. Of the 68 global hubs tracked

in this report, 59% (40 markets) recorded an annual increase in

prime rents, 25% (17 markets) experienced no change and only

16% (11 markets) saw decreases.

Why are logistics rents growing?Rent growth stems from strong occupier demand for logistics

space throughout each region, driven by a focus on expanding

and modernizing the supply chain. In many of the core hub

markets, supply for prime logistics space is extremely tight,

placing pressure on the prime rents. Furthermore, a scarcity

of suitable development sites, especially in the U.S., has limited

the development of new supply despite persistent user demand.

Finally, factors such as supportive government policies, strong

e-commerce growth and the modernization of the logistics

industry has contributed to rent growth.

Land-constrained hubs most expensive, U.S. markets most affordableHong Kong is the world’s most expensive logistics market,

followed by London and Tokyo. This is not surprising, considering

these are extremely dense cities with land constraints. Conversely,

urban areas with larger land supplies are showing the lowest rents,

including U.S. hubs like Chicago, Dallas-Ft. Worth and Atlanta.

U.S. coastal hubs seeing exceptional growthIn the Americas, prime logistics rents increased 5.6% during

2015, largely due to massive growth in U.S. coastal markets,

where strong occupier demand drove up pricing. In Oakland,

which recorded the largest annual increase in prime rents globally,

flight-to-quality is common for inner-bay logistics users despite

the high cost. New development in some markets, like the Inland

Empire, is commanding premium rates.

Asia Pacific markets resilient despite China slowdownPrime rents for space in logistics facilities in Asia Pacific rose

by 2.5% over the past year, with Seoul and Auckland recording

growth rates of more than 5%, driven by robust demand from

e-commerce and third-party logistics firms.

Moderate increases in EMEA prime logistics rentsRents in EMEA ticked up a modest 0.8% year-over-year, but

there were large differences, with land-constrained markets

showing rising rents, while hubs in markets with ample

development potential, for example in the Netherlands or

in Poland, remained flat.

Executive Summary


1Oakland

29.8%

4U.K. Midlands

13.0%

2New Jersey

15.0%

3Inland Empire

13.5%

5Santiago

10.9%

6Ciudad Juárez

10.2%

9Atlanta

6.8%

7Los Angeles–

Orange County

9.8%

10Seoul

6.5%

8Dallas–

Ft. Worth

8.0%

2

4

5

9867

13 10

The 10 Fastest Growing Markets(Annual percent change in prime logistics rents as of Q4 2015)

Source: CBRE Research, Q4 2015.


1Hong Kong

$28.94

4Singapore

$10.91

2Tokyo

$16.74

3London

$16.36

5Stockholm

$9.90

6Shanghai

$9.44

9Sydney

$8.34

7Manchester–

Liverpool

$8.75

10Shenzhen

$8.27

8Leeds– Sheffield

$8.45

37 8 5

The 10 Most Expensive Markets(Ranked on a US$ per sq. ft. per annum basis; foreign exchange rate as of 12/31/2015)

110

4

6 2

9



Over the past two decades, there has been a dramatic trans-

formation in global trade and the industrial real estate market.

Today, industrial and logistics facilities are at the heart of rapidly

evolving and expanding global supply chains and trade networks,

serving as vital cogs in storing and moving billions of products

across multimodal transportation networks worldwide at speeds

once thought unimaginable.

At the same time, an ever-increasing share of retail sales—

7.5% today, up from 5.6% in early 2013, according to eMarketer

—is taking place over the Internet, prompting both traditional

retailers and e-commerce companies to reshape their supply

chain organizations in key markets to fulfill online orders as

quickly as possible. Moreover, manufacturers and other industrial

users are implementing more advanced “just-in-time” schemes

to optimize inventory costs, and keeping customers happy, further

stimulating demand for warehouse facilities.

However, not all industrial assets are equal. Advanced logistics

users require modern big-box centers, which often have highly

specialized features not often found in the typical warehouse.

These “prime” facilities typically are at least 100,000 sq. ft.,

or 10,000 sq. m., in size—in many cases, much larger than

that—with clear ceiling heights of at least 26 feet, or 8 meters,

to accommodate high-tech stacking racks and automated storage

and retrieval systems, and have more loading docks—typically

one for every 10,000 sq. ft., or 1,000 sq. m., of storage space—

to ensure rapid and efficient throughput of goods in and out

of the facility. They are materially more expensive to build and

to lease than lower-grade industrial facilities.

Location also matters more than ever. Sophisticated supply chain

schemes require locations that are near or directly connected

to transportation networks to take in goods, and, at the same time,

need to be well-connected to—or even located within—major

metros to deliver goods to the end user as quickly as possible.

Moreover, more firms are seeking smaller light industrial infill

facilities to supplement their big boxes, stocking them with

the most in-demand products and partnering with local courier

services to gain a speed-to-market advantage over competitors.

With this prime segment of the market becoming ever more

important to the operations of logistics users—as well as to

the bottom line of real estate owners and investors—CBRE

Industrial and logistics distribution facilities are at the heart of rapidly evolving and expanding global supply chains and trade networks

Introduction


Secondly, land-constrained markets command a significant

rent premium over other markets. Most of the hubs on the most

expensive list are markets where available land for industrial

development is limited and expensive. Markets where land is

more plentiful—most notably major U.S. hubs like Chicago,

Dallas-Ft. Worth and Atlanta—are far more affordable.

Finally, there is new development taking place to meet the rising

demand for prime space. However, this likely won’t alleviate

rent pressures, as these facilities will remain in high demand

thanks to the secular shift in e-commerce and trade. In other

words, occupiers in most parts of the world (with some notable

exceptions outlined later on) should expect these trends to persist

for a while—and plan accordingly.

Research has created this new semiannual report to enable

readers to compare and understand prime rent values in 68

key logistics hubs around the world, ranking them from most

expensive to least. We segment out older, non-like facilities

from the data set and report rent values on a dollar-per-sq.-ft.

basis to ensure a like-for-like comparison across markets.

The results show three clear trends. Firstly, prime rent levels

are resilient despite the recent economic headwinds, with prime

industrial rents at the same or higher level from year-end 2014

in 85% of the tracked markets, and the global average up 2.8%

year-over-year. This is true even in Asia Pacific, which saw a 2.5%

year-over-year rise in prime rents despite the slowdown of the

Chinese economy.

Occupiers in most parts of the world should expect these trends to persist for a while—and plan accordingly


In the U.S., achievable prime industrial rents appreciated in

most markets, with the strongest growth in coastal hubs like

Oakland, New Jersey and the Inland Empire. Other markets

in the Americas that saw strong gains in 2015 included Santiago,

Ciudad Juárez and Los Angeles-Orange County. These are

major global and regional hubs that are targeted by many

logistics users thanks to their large catchment areas (the size

of the market that the hubs have access to) and access to key

supply chain infrastructure.

Markets in the Americas are seeing strong demand for high-

quality industrial space from supply chain users, and the

availability of Class A product continues to decline in most

locations. Furthermore, there is an increased emphasis on

speed-to-market delivery schemes, with e-commerce continuing

to transform distribution networks. Big-box distribution

centers are no longer the only focal point among occupiers—

light distribution facilities located near or within major metros

are growing more popular with users seeking to meet consumer

demands for same- and next-day delivery of goods. Rents in

this segment have risen significantly in some areas, especially

in infill submarkets that are well positioned to serve the

urban core.

European markets saw more marginal gains overall, with several

hubs experiencing no growth at all. The U.K. Midlands, London

and Berlin saw the strongest growth, with an average of 7.9%

year-over-year growth in prime industrial rents. These areas are

seeing increased demand from e-commerce-related users as

more Europeans shop online. Many other hubs are profiting from

growing consumer spending, but any upward pressure on rents

is being alleviated by new development, which, in an environment

of declining yields, can be offered against favorable rents.

On the other end of the spectrum, Moscow had the deepest

decline, showing a 45.8% drop in prime industrial rents

(measured in U.S. dollars) due to declining oil prices that

have led to recessionary conditions. The Moscow market has

adapted to a lower level of occupier activity and will need

to digest the surplus space that was developed speculatively

before the economic downturn set in.

Markets in the Americas are seeing strong demand for high-quality industrial space from supply chain users, and the availability of Class A product continues to decline in most locations

Regional PerformanceAmericas markets post strong gains, EMEA and Asia Pacific more mixed



China is an emerging market with large increases in completions every year, and these new properties skew the spot rent. To prevent this, CBRE Research has made the appropriate adjustments to the % changes to reflect a “like-for-like” in rental growth.

Oakla

nd

New

Jerse

y

Inlan

d Emp

ire

Santi

ago

Ciuda

d Juá

rez

Seou

l

Auck

land

Ning

bo

Hang

zhou

Nanji

ng

Midla

nds

Lond

on

Berli

n

Milan

Barce

lona

29.8%

15.0%13.5%

10.9% 10.2%

6.5%5.2% 5.0% 5.0% 5.0%

13.0%

6.2%4.3% 4.2% 4.2%

U.S. markets lead growth, Chinese markets faring wellTOP 5 GROWTH MARKETS BY REGION

16increases

2decreases

9increases

13unchanged

1decrease

15increases

5unchanged

7decreases

THE AMERICAS

THE AMERICAS EMEA APAC GLOBAL

EMEA APAC

5.6%growth in prime rent




Annual Change Breakdown Q4 2014–Q4 2015

CHANGES BY MARKET


have fared relatively well, with the U.S. continuing to lead

global growth. Due to China’s ongoing transformation from

a manufacturing economy towards a consumption-based

economy, the demand for commodities has fallen. China is

responsible for 14% of the world’s oil imports, 58% of the world’s

soybean imports and 58% of the world’s iron ore imports.1

Thus, the slowdown in China is a major contributor to the

negative sentiment for commodities. Simultaneously, supply

of commodities, such as oil, is at an all-time high, with the U.S

now competing for Asian markets as it continues its growth

in domestic production. Consequently, we have seen a dramatic

collapse in prices, and this is having a significant impact on

the global economy.

The fall in commodity prices is undoubtedly good for most

advanced economies and net importer countries, with lower

gas (petrol) prices allowing consumers to spend more, helping

boost the retail and industrial sectors and spurring demand

for logistics space. On the other hand, falling commodity prices

are bringing headline inflation rates down and causing economic

weaknesses in some producing countries, such as Russia,

Australia, and Brazil, where we have seen a significant decrease

in industrial rent.

Overall, global consumer demand is strong and fundamentals

remain positive for prime and well-located logistics space.

One of the main drivers of this continues to be e-commerce,

contributing to the growth and expansion of global and emerging

hubs. E-commerce sales in the U.S. are expected to grow to more

Despite the slowdown in China’s economy, 15 out of the 27

markets tracked in Asia Pacific experienced rent growth. Third-

party logistics firms and retailers are taking a longer-term view

and continue to upgrade their distribution networks.

Seoul recorded 6.5% annual growth in prime rents as supportive

government policies, strong e-commerce growth and the

modernization of the logistics industry continues in South Korea.

The small, open economies of Hong Kong and Singapore showed

some weakness in rents as regional trade slowed, though they

remain among the most expensive industrial markets worldwide.

Rising rents can be attributed to shrinking supply amid strong

occupier demand for Class A/Grade A logistics space in prime

locations. In EMEA, growth can be seen in markets where there

is less opportunity for new development due to land constraints—

a factor driving up rents in hubs in the U.K., Germany and Spain.

In the Americas, the demand for this type of product is outpacing

supply, with the availability rate rapidly declining in several

markets. The year-end 2015 availability rate in the U.S. was 510

basis points (bps) lower than its recessionary peak of 14.5%,

and stood at its lowest point since 2001. Thus, increasingly tight

supply, coupled with healthy demand from supply chain and

distribution users, have helped strong rent growth in major and

emerging hubs throughout the U.S.

The global economy has been hit with some recent challenges,

most notably the slowdown in China as well as exchange rate

volatility in Asian and European markets. Mature economies

1. http://marketrealist.com/2015/10/muted-demand-for-commodities/

The year-end 2015 availability rate in the U.S. was 510 basis points lower than its recessionary peak of 14.5%, and stood at its lowest point since 2001


Warsaw54

Tianjin44

Region RegionCountry Country% Change % ChangeMarket MarketRank Rank

Americas

EMEA

United States

United Kingdom

29.8%

6.2%

Oakland

London

1

11

Americas

APAC

United States

China

13.5%

5.0%

Inland Empire

Ningbo

3

13

AmericasMexico 2.2%Bajío33

AmericasUnited States 3.8%Chicago27

AmericasUnited States 9.8%LA / Orange County7

AmericasUnited States 1.2%Houston37

AmericasBrazil -10.5%São Paulo67

APAC

EMEA

Australia

Sweden

-3.9%

0.0%

Adelaide

Stockholm

65

43

EMEAItaly 4.2%Milan22

AmericasUnited States 15.0%New Jersey2

AmericasUnited States 8.0%Dallas / Ft. Worth8

Americas

APAC

Mexico

China

10.2%

2.2%

Ciudad Juárez

Guangzhou

6

34

APACChina 4.3%Shanghai20

EMEAUnited Kingdom 0.0%Manchester / Liverpool42

AmericasChile 10.9%Santiago5

APAC

Americas

EMEA

China

United States

Germany

2.9%

6.8%

4.3%

Beijing

Atlanta

Berlin

31

9

19

APACChina 4.9%Suzhou17

APACChina 2.1%Chongqing35

APACJapan -1.3%Tokyo59

Americas

Americas

United States

Mexico

0.3%

-2.4%

South Florida

Monterrey

39

63

APACSingapore -1.6%Singapore61

APACChina 0.0%Wuhan41

APACNew Zealand 5.2%Auckland12

APACChina 5.0%Hangzhou14

AmericasUnited States 4.9%Seattle18

APAC

APAC

China

China

5.0%

3.2%

Wuxi

Chengdu

16

30

APAC

APAC

Australia

South Korea

2.4%

6.5%

Sydney

Seoul

32

10

Americas

EMEA

Mexico

Germany

2.0%

0.0%

Mexico City

Hamburg

36

46

APACChina 0.0%Shenyang58

APACChina 0.4%Dalian38

APACAustralia -1.5%Brisbane60

Americas

APAC

Canada

Australia

0.2%

-3.3%

Toronto

Melbourne

40

64

APAC

APAC

Hong Kong, China

Australia

-1.8%

-6.1%

Hong Kong

Perth

62

66

EMEASpain 4.2%Barcelona23

APACChina 3.8%Shenzhen25

APAC

EMEA

China

France

5.0%

3.4%

Nanjing

Paris

15

29

AmericasUnited States 4.3%Philadelphia21

EMEAGermany 0.0%Frankfurt45

APACAustralia 0.0%Canberra57

EMEAGermany 0.0%Dusseldorf / Cologne47

EMEAGermany 0.0%Ruhr49

EMEAHungary 0.0%Budapest53

EMEA

EMEA

Spain

Belgium

0.0%

0.0%

Madrid

Antwerp

51

55

EMEAGermany 3.8%Munich24

EMEAUnited Kingdom 13.0%Midlands4

EMEAUnited Kingdom 3.8%Leeds / Sheffi eld26

EMEACzech Republic 3.6%Prague28

APACChina 0.0%Qingdao56

EMEANetherlands 0.0%Rotterdam48

EMEANetherlands 0.0%Tilburg/Eindhoven/Venlo52

EMEA

EMEA

Netherlands

Russia

0.0%

-45.8%

Amsterdam

Moscow

50

68

APAC

EMEA

China

Poland

0.0%

0.0%

Figure 1: Regional Performance, Year-over-Year Change in Rent (Ranked by the change in prime taking rent in the local unit per annum as of Q4 2015)

Ranked by 12-month % change increases as of Q4 2015. Rents are based on achievable rents on net fl oor area basis, exclusive of taxes, expenses and service changes. Source: CBRE Research, Q4 2015.

China is an emerging market with large increases in completions every year. These new properties skew the spot rent. To prevent this, CBRE Research has adopted “like-for-like” rental growth numbers which doesn’t include the new completions until a stabilization period.


Similar to Japan a decade ago, the Korean logistics market

is undergoing modernization. The transformative effects of

e-commerce and the search for greater efficiency among third-

party logistics firms is spurring demand for modern logistics

facilities in Seoul. Development has been shifting from southern

Seoul (Yongin, Incheon) to western Seoul (Incheon, Ansan,

Pyeongtaek) due to greater land availability, infrastructure

developments, and increased international trade over the years.

In Europe, consumer spending online is expected to grow more

on the mainland than in the U.K., which is already a global leader

in terms of e-commerce sales, accounting for one in three of

all European purchases made by consumers over the Internet.

With limited land supply in most markets, the ability to develop

large-scale inner city warehousing is constrained. In response

to this, operators have been forced to create networks of smaller

delivery sites on the periphery, connected through one or more

“hub” warehouses in strategic locations. The rise of such urban

distribution facilities is mostly visible in Europe’s biggest cities,

such as London, Paris and Madrid, but is increasingly impacting

mid-sized cities too. As the logistics industry in Europe responds

to the need for greater economies of scale, there have been

several mergers, acquisitions and restructurings, resulting in

a consolidation of the warehouse footprint.

than $400 billion in the next several years, with Forrester Research

estimating $414 billion in sales in 2018 and eMarketer estimating

an average growth of 15% from 2016.2

Industrial owners and occupiers are adjusting to this growing

trend. The underlying demographic shifts are a key factor here,

and as living standards around the world continue to rise, new

markets and customer segments are opening to global suppliers.

Strong population growth in emerging markets has altered

the shape of consumption and distribution networks in place

to serve these populations.

In China, for example, e-commerce has taken off in first-

and second-tier cities. Despite the overall economic slow-

down in China, demand remains for logistics facilities in

Shanghai, driven by fashion retailers, e-commerce and third-

party logistics firms.

In addition, logistics land supply are becoming more limited

as local governments are reluctant to release land for logistics

development due to lack of tax revenues generated from

such projects. As a result, there is continued interest in

logistics by developers and investors. Pension funds and

private equity players have co-invested into the China logistics

sector, demonstrating the structural lack of modern logistics

facilities in the country, especially the tier-one cities.

E-commerce sales in the U.S. are expected to grow to more than $400 billion in the next several years, with Forrester Research estimating $414 billion in sales in 2018

2. https://www.internetretailer.com/trends/sales/us-e-commerce-sales-2013-2017/


In South America, there is uneven growth, with São Paulo

experiencing a sharp year-over-year decline industrial rents.

This can largely be attributed to the recession and political

unrest in Brazil, which has hampered growth in arguably the

most significant South American hub. On the other hand,

Santiago, despite some economic uncertainty, has seen strong

rent growth. This market has benefited from the growth of

Port San Antonio, one of the fastest-growing ports in Latin

America and a key gateway to Asian markets, and this is reflected

in the success of prime logistics facilities in this emerging

global hub.

Furthermore, some hubs in the Americas are in a cycle of new

development as they respond to limited supply, particularly

in the Class A segment. In the U.S., the fourth quarter of 2015

saw 44.7 million sq. ft. completed, with an additional 183 million

sq. ft. under construction. Speculative development has become

prevalent and represents the majority of new development

in most core markets in the U.S. This, coupled with falling

availability and strong leasing demand, has pushed sustained

national rent growth.


Hong Kong has the most expensive rents for prime logistics

space in the world, at $28.94 per sq. ft. per annum. This is due to

the unique high-rise nature of the market, as prime warehouses

are multi-story properties with ramp-access to each individual

floor, making the gross to net efficiency ratio much lower than

the traditional single-story logistics facilities found elsewhere

in the world. As a result, rents in Hong Kong are 73% greater

than the second most expensive market, Tokyo, where the

average prime rent ended 2015 at $16.74 per sq. ft. per annum.

The other eight of the top 10 high-priced industrial hubs

are in EMEA and Asia Pacific, including London, Singapore,

Stockholm, Shanghai, Manchester-Liverpool, Leeds-Sheffield,

Sydney and Shenzhen.

Of the top 15 markets with the most expensive achievable rent,

only one is in the Americas: Los Angeles / Orange County.

The lower-priced markets are mostly located in the Americas

and Asia Pacific, including Nanjing, Toronto, Chicago, Dallas-

Fort Worth and Atlanta. These hubs have achievable rates ranging

from $3.13 to $4.43 per sq. ft. per annum.

Hong Kong has the most expensive rents for prime logistics space due to the unique high-rise nature of the market

Most Expensive Global HubsHong Kong, Tokyo and London top list;

No U.S. markets among the top 10


Inland Empire54

Tilburg/Eindhoven/Venlo44

Region RegionCountry CountryRent RentMarket MarketRank Rank

APAC

EMEA

Hong Kong, China

Germany

$28.94

$8.21

Hong Kong

Munich

1

11

EMEA

APAC

United Kingdom

South Korea

$16.36

$7.94

London

Seoul

3

13

APACChina $6.13Chengdu33

EMEARussia $6.58Moscow27

EMEAUnited Kingdom $8.75Manchester / Liverpool7

APACChina $5.88Hangzhou37

AmericasUnited States $3.76Dallas / Ft. Worth67

Americas

APAC

Canada

China

$4.19

$5.58

Toronto

Chongqing

65

43

EMEAUnited Kingdom $7.09Midlands22

APACJapan $16.74Tokyo2

EMEAUnited Kingdom $8.45Leeds / Sheffi eld8

APAC

EMEA

China

France

$9.44

$6.08

Shanghai

Paris

6

34

APACAustralia $7.39Canberra20

APACChina $5.61Wuhan42

EMEASweden $9.90Stockholm5

EMEA

APAC

EMEA

Netherlands

Australia

Germany

$6.28

$8.34

$7.54

Amsterdam

Sydney

Frankfurt

31

9

19

AmericasUnited States $7.59Houston17

EMEASpain $6.08Madrid35

APACChina $4.78Wuxi59

EMEA

Americas

Germany

Mexico

$5.65

$4.46

Ruhr

Monterrey

39

63

EMEABelgium $4.66Antwerp61

AmericasMexico $5.61Mexico City41

AmericasUnited States $8.04LA / Orange County12

APACAustralia $7.85Brisbane14

APACChina $7.57Beijing18

EMEA

Americas

Spain

United States

$7.60

$6.51

Barcelona

South Florida

16

30

APAC

APAC

China

China

$6.13

$8.27

Guangzhou

Shenzhen

32

10

APAC

APAC

China

Australia

$6.02

$5.43

Ningbo

Melbourne

36

46

AmericasBrazil $4.79São Paulo58

EMEAGermany $5.83Berlin38

APACChina $4.76Dalian60

APAC

APAC

Australia

China

$5.65

$4.43

Adelaide

Nanjing

40

64

APAC

Americas

China

United States

$4.56

$4.13

Qingdao

Chicago

62

66

APACNew Zealand $7.01Auckland23

APACChina $6.78Suzhou25

APAC

EMEA

Australia

Germany

$7.67

$6.56

Perth

Dusseldorf / Cologne

15

29

AmericasUnited States $7.32Oakland21

EMEAHungary $5.47Budapest45

EMEAPoland $4.86Warsaw57

APACChina $5.37Tianjin47

AmericasChile $5.24Santiago49

EMEAItaly $5.07Milan53

Americas

APAC

Mexico

China

$5.10

$5.01

Ciudad Juárez

Shenyang

51

55

EMEAGermany $6.93Hamburg24

APACSingapore $10.91Singapore4

EMEANetherlands $6.58Rotterdam26

AmericasUnited States $6.58New Jersey28

AmericasUnited States $4.90Philadelphia56

EMEACzech Republic $5.29Prague48

AmericasMexico $5.07Bajío52

Americas

Americas

United States

United States

$5.16

$3.13

Seattle

Atlanta

50

68

EMEA

Americas

Netherlands

United States

$5.57

$5.04

Figure 2: Global Prime Logistics Rent, Most Expensive (Ranked by prime taking rent in US$ per sq. ft. per annum as of Q4 2015)

Rents are based on achievable rates, exclusive of taxes expenses, and service changes. Source: CBRE Research, Q4 2015.


Chicago Chicago USD sq. ft. p. a. 4.13 4.13 40.77 3.8% 3.8% 15.2%

South Florida Miami USD sq. ft. p. a. 6.51 6.51 64.26 0.3% 0.3% 11.4%

Inland Empire Inland Empire USD sq. ft. p. m. 0.42 5.04 49.75 13.5% 13.5% 26.0%

Ciudad Juárez Ciudad Juárez USD sq. ft. p. a. 5.10 5.10 50.34 10.2% 10.2% 22.3%

Dallas / Ft. Worth Dallas / Ft. Worth USD sq. ft. p. a. 3.76 3.76 37.12 8.0% 8.0% 19.9%

Monterrey Monterrey USD sq. m. p. m. 4.00 4.46 44.04 -2.4% -2.4% 8.3%

Houston Houston USD sq. ft. p. a. 7.59 7.59 74.93 1.2% 1.2% 12.3%

Atlanta Atlanta USD sq. ft. p. a. 3.13 3.13 30.90 6.8% 6.8% 18.6%

Philadelphia Philadelphia USD sq. ft. p. a. 4.90 4.90 48.37 4.3% 4.3% 15.7%

Oakland Oakland USD sq. ft. p. m. 0.61 7.32 72.26 29.8% 29.8% 44.1%

Mexico City Mexico City USD sq. m. p. m. 5.03 5.61 55.38 2.0% 2.0% 13.3%

Seattle Seattle USD sq. ft. p. m. 0.43 5.16 50.94 4.9% 4.9% 16.4%

New Jersey New Jersey USD sq. ft. p. a. 6.58 6.58 64.95 15.0% 15.0% 27.7%

Bajio Bajio USD sq. m. p. m. 4.55 5.07 50.09 2.2% 2.2% 13.5%

Santiago Santiago UF sq. m. p. m. 0.13 5.24 51.73 10.9% -2.1% 8.7%

São Paulo São Paulo BRL sq. m. p. m. 17.00 4.79 47.26 -10.5% -40.0% -33.4%

LA / Orange County LA / Orange County USD sq. ft. p. m. 0.67 8.04 79.37 9.8% 9.8% 21.9%

Toronto Toronto CAD sq. ft. p. a. 5.81 4.19 41.41 0.2% -16.2% -6.9%

Local Measure USD Per Sq. Ft. EUR Per Sq. M.

Market Primary HubMarket

Local Currency & Measure

Avg. Achievable Rent

Avg. Achievable Rent Y-o-Y Change Avg. Achievable

Rent Y-o-Y ChangeY-o-Y Change

Figure 3: Americas Prime Logistics Rents, Q4 2015








Sydney Sydney AUD sq. m. p. a. 122.91 8.34 82.32 2.4% -7.7% 2.4%

Melbourne

Shenyang

Melbourne

Hunnan

AUD sq. m. p. a.

RMB sq. m. p. m.

80.00

29.95

5.43

5.01

53.58

49.45

-3.3%

0.0%

-12.9%

-4.4%

-3.3%

6.5%

Seoul

Tokyo

Seoul

Tokyo Bay Area

KRW pyong p. m.

JPY tsubo p. m.

27700.00

5950.00

7.94

16.74

78.41

165.27

6.5%

-1.3%

-1.1%

-1.3%

9.8%

9.5%

Hangzhou

Hong Kong

Overall Market

Hong Kong

RMB sq. m. p. m.

HKD sq. ft. p. m.

35.17

18.84

5.88

28.94

58.08

285.67

5.0%

-1.8%

0.4%

-1.8%

11.8%

9.0%

Wuhan Huangpu & Dongxihu RMB sq. m. p. m. 33.52 5.61 55.35 0.0% -4.4% 6.5%

Wuxi Overall Market RMB sq. m. p. m. 28.56 4.78 47.16 5.0% 0.4% 11.8%

Nanjing

Suzhou

Shenzhen

Qingdao

Beijing

Brisbane

Adelaide

Nanjing Aviation Logistics Park

Suzhou Industrial Park

China MerchantsBonded Logistics Park

Qingdao AirportLogistics Park

Beijing AirportLogistics Park

Brisbane

Adelaide

RMB sq. m. p. m.

RMB sq. m. p. m.

RMB sq. m. p. m.

RMB sq. m. p. m.

RMB sq. m. p. m.

AUD sq. m. p. a.

AUD sq. m. p. a.

26.50

40.56

49.45

27.28

45.28

115.71

83.33

4.43

6.78

8.27

4.56

7.57

7.85

5.65

43.76

66.97

81.65

45.04

74.77

77.49

55.81

5.0%

4.9%

3.8%

0.0%

2.9%

-1.5%

-3.9%

0.4%

0.3%

-0.8%

-4.4%

-1.7%

-11.2%

-13.3%

11.8%

11.7%

10.5%

6.5%

9.6%

-1.5%

-3.8%

Guangzhou Huangpu RMB sq. m. p. m. 36.67 6.13 60.55 2.2% -2.3% 8.8%

Shanghai

Tianjin

Waigaoqio

Primary Market

RMB sq. m. p. m.

RMB sq. m. p. m.

56.45

32.11

9.44

5.37

93.21

53.03

4.3%

0.0%

-0.3%

-4.4%

11.1%

6.5%

Dalian Dayaowan RMB sq. m. p. m. 28.45 4.76 46.97 0.4% -4.0% 6.9%

Auckland Auckland NZD sq. m. p. a. 111.00 7.01 69.25 5.2% -8.3% 1.8%

Perth

Canberra

Perth

Canberra

AUD sq. m. p. a.

AUD sq. m. p. a.

113.06

109.00

7.67

7.39

75.72

73.00

-6.1%

0.0%

-15.4%

-9.9%

-6.1%

0.0%

Chongqing Airport Submarket RMB sq. m. p. m. 33.34 5.58 55.05 2.1% -2.4% 8.7%

Ningbo

Singapore

Overall Market

Singapore

RMB sq. m. p. m.

SGD sq. ft. p. m.

36.00

1.28

6.02

10.91

59.45

107.72

5.0%

-1.6%

0.4%

-7.5%

11.8%

2.6%

Chengdu Aviation Submarket RMB sq. m. p. m. 36.67 6.13 60.55 3.2% -1.4% 9.9%


Figure 4: Asia Pacifi c Prime Logistics Rents, Q4 2015


China is an emerging market with large increases in completions every year, and these new properties skew the spot rent. To prevent this, CBRE Research has made the appropriate adjustments to the % changes to refl ect a “like-for-like” in rental growth.


Amsterdam Amsterdam EUR sq. m. p. a. 62.00 6.28 62.00 0.0% -9.9% 0.0%

Frankfurt Frankfurt EUR sq. m. p. m. 6.20 7.54 74.40 0.0% -9.9% 0.0%

Berlin

Warsaw

Berlin

Waraw

EUR sq. m. p. m.

EUR sq. m. p. m.

4.80

4.00

5.83

4.86

57.60

48.00

4.3%

0.0%

-6.0%

-9.9%

4.3%

0.0%

Munich Munich EUR sq. m. p. m. 6.75 8.21 81.00 3.8% -6.5% 3.8%

Prague Prague EUR sq. m. p. m. 4.35 5.29 52.20 3.6% -6.7% 3.6%

Madrid Madrid EUR sq. m. p. a. 60.00 6.08 60.00 0.0% -9.9% 0.0%

Dusseldorf / Cologne Dusseldorf EUR sq. m. p. m. 5.40 6.56 64.80 0.0% -9.9% 0.0%

Paris Paris EUR sq. m. p. a. 60.00 6.08 60.00 3.4% -6.8% 3.4%

Stockholm Stockholm SEK sq. m. p. a. 900.00 9.90 98.30 0.0% -7.6% 3.5%

Midlands

Ruhr

Birmingham

Duisburg

GBP sq. ft. p. a.

EUR sq. m. p. m.

6.50

4.65

7.09

5.65

94.95

55.80

13.0%

0.0%

1.8%

-9.9%

0.5%

0.0%

Budapest Budapest EUR sq. m. p. m. 4.50 5.47 54.00 0.0% -9.9% 0.0%

Manchester / Liverpool Manchester GBP sq. ft. p. a. 5.95 8.75 82.59 0.0% -6.0% 0.0%

London

Tilburg / Eindhoven / Venlo

M25 Ring Road

Eindhoven

GBP sq. ft. p. a.

EUR sq. m. p. a.

11.13

55.00

16.36

5.57

154.49

55.00

6.2%

0.0%

0.0%

-9.9%

6.2%

0.0%

Antwerp Antwerp EUR sq. m. p. a. 46.00 4.66 46.00 0.0% -9.9% 0.0%

Barcelona

Milan

Moscow

Barcelona

Milan

Moscow

EUR sq. m. p. a.

EUR sq. m. p. a.

USD sq. m. p. a.

75.00

50.00

65.00

7.60

5.07

6.58

75.00

50.00

65.00

4.2%

4.2%

-45.0%

-6.2%

-6.2%

-41.0%

4.2%

4.2%

-34.4%

Rotterdam Rotterdam EUR sq. m. p. a. 65.00 6.58 65.00 0.0% -9.9% 0.0%

Leeds / Sheffi eld Leeds GBP sq. ft. p. a. 5.75 8.45 84.14 3.8% -2.0% 9.4%

Hamburg Hamburg EUR sq. m. p. m. 5.70 6.93 68.40 0.0% -9.9% 0.0%







Figure 5: EMEA Prime Logistics Rents, Q4 2015



MethodologyThis report outlines rents for prime logistics facilities in 68

global hubs in the Americas, Asia Pacific and EMEA as of Q4 2015.

Data in this analysis is derived from achievable rents on a net

floor area, exclusive of taxes, expenses, and service charges. Top

market rent was gathered based on industrial distribution space

of the highest quality and specification, and in the best location

within each industrial hub. The chosen hubs are reflective of

CBRE’s “Global and Emerging Logistics Hubs” report from 2015

that explores the traditional global markets as well as the “up-

and-coming” areas that are growing rapidly. These hubs are based

on a broad set of logistics performance factors divided into three

categories: infrastructure and accessibility, market size, and

business environment.

Before capturing the rent data, a set of guidelines were established

in order to make an even comparison throughout the hubs. The

key variables for prime logistics buildings include:

• Facilities greater than 100,000 sq. ft./10,000 sq. m. in size

• Clear ceiling height greater than 26-36 feet/ 8-10 meters

• Office space to industrial space ratio of no more than 10%

• Loading dock ratio of 1 dock: 10,000 sq. ft /1,000 sq. m. or less

• Building must be purpose-built for logistics and distribution

(manufacturing facilities not included)

Understandably, each market has its own set of criteria for

“prime” logistics space, and therefore the appropriate building

size, specifications, and loading dock ratio varies by market.*

Terms and DefinitionsThe global prime industrial rent survey provides a snapshot

of achievable net rental rates for high quality, Grade A logistics

space in traditional and emerging global hubs. Since industrial

lease rates can vary substantially in each market and depending

on the particular transaction, this data is meant to provide

comparative benchmarks only.

Explanation of Columns Percentage Change: Documents the rate of change in local

rents over the preceding 12 months. These changes are calculated

on the basis of local currency values to avoid distortions from

exchange rate fluctuations.

Average Achievable Rent—Local Currency/Measure: The rent

quoted is the typical “achievable” rent from logistics properties

aligning with our key variables. Rents are expressed as the “face”

rates, without accounting for any tenant incentives that may be

necessary to achieve it. Rents are stated in the local currency and

prevailing unit of measure based on net floor area.

Rents in Japan and Korea are quoted as “tsubo per month” and

“pyeong per month.” respectively, which is approximately 35.58

sq. ft. based on the equivalent measurement of two tatami mats.

Regional and Global Percent ChangesAggregated changes in rental costs both at the global and regional

level are based on a weighted average of the rental change (local

currency) in the individual cities. The weighting for each city is a

function of its country GDP, which is divided among the cities in

that country covered in the report according to the importance of

each city as a commercial real estate market.

*Some markets deviate from this criteria, such as New Zealand: size > 1,500 sq. m.; Hong Kong: clear ceiling height: 4 m.; Hong Kong: cargo-lift access buildings have lower throughput; Tokyo: clear ceiling height: 5.5 m.; Tokyo: loading dock ratio 1 dock: 1,300 sq. m. China: loading dock ratio 1 dock: 1,300 sq. m.

Methodology & Definitions

http://www.cbre.com/research-and-reports/global-emerging-logistics-hubs-2015

Industrial & Logistics Research

David Egan

Head of Industrial & Logistics Research, Americas

+312 935 1892

[email protected]

Twitter: @Egan2David

Matthew Walaszek

Senior Research Analyst, Global Industrial

& Logistics

+1 312 297 7686

[email protected]

Rosanna Tang

Director, Asia Pacific Research

+852 2820 2806

[email protected]

Jason Fong

Manager, Asia Pacific Research

+852 2820 2867

[email protected]

Machiel Wolters

Head of Industrial & Logistics Research, EMEA

+31 20 626 26 91

[email protected]

Twitter: @MachielWolters

CBRE Research Leadership

Nick Axford, Ph.D.

Head of Research, Global

+44 20 7182 2876

[email protected]

Richard Barkham, Ph.D.

Chief Economist, Global

+44 20 7182 2665

[email protected]

Neil Blake, Ph.D.

Head of Research, EMEA

+44 20 7182 2133

[email protected]

Twitter: @neilblake123

Henry Chin, Ph.D.

Head of Research, Asia Pacific

+852 2820 8160

[email protected]

Twitter: @HenryChinPhD

Spencer Levy

Head of Research, Americas

+1 410 951 8443

[email protected]

Twitter: @SpencerGLevy

To learn more about CBRE Research, or to access additional research reports, please visit the Global Research Gateway at

www.cbre.com/researchgateway.

Disclaimer: Information contained herein, including projections, has been obtained from sources believed to be reliable. While we do not doubt its accuracy, we have not verified it and make no guarantee, warranty or representation about it. It is your responsibility to confirm independently its accuracy and completeness. This information is presented exclusively for use by CBRE clients and professionals and all rights to the material are reserved and cannot be reproduced without prior written permission of CBRE.

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