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| Cushman & Wakefield reports falling industrial rents Commercial rents on industrial property fell by an average of 5.5% in 2009 following an unprecedented fall in consumer demand for goods during the global recession. This global measure of economic performance in Cushman & Wakefield's Industrial Space Across the World report, shows that all regions of the world suffered compressed rents for the first time in the report's 15 year history. Industrial rents are a key indicator of economic performance and inextricably linked to demand for manufacturing and industrial production and consumer demand for goods. Although 2009 saw a marked fall, there were signs that values were stabilising toward the end of the year. Cushman & Wakefield, the world's largest privately-held commercial real estate services firm, expects 2010 to see some rent increases toward year end, the extent of which will be driven by the speed in recovery of global export activity. In the ranking of the 49 most expensive global locations, London Heathrow remained the most expensive with an occupancy cost of €200 sq m per year, around one third more expensive than second placed Tokyo at €152 sq m per year. Hong Kong was in third position €146 sq m per year. There were a small number of locations globally that managed to record rental growth, mainly because of a lack of supply of prime space available to lease or the resilience of logistics space which has been less affected by the downturn. Two Indian locations, Gurgaon in New Delhi and Chakan in Pune, recorded the biggest increases at 16.7% and 15.4% respectively. Industrial rental performance in the European market was polarised between Western Europe which recorded only a 3% fall through the year and Central and Eastern Europe which saw a fall of over 12%. The Baltic nations of Latvia, Lithuania and Estonia all saw rents tumble by over 30%, with large manufacturing locations such as Russia and Ukraine seeing falls of 21% and 22% respectively. Ireland suffered the biggest fall in Western Europe with a 20% decrease. Rents in South America were the most resilient in the world and fell by just 0.1% with key locations in São Paulo and Rio de Janeiro in Brazil actually showing rental growth. The two cities are now the second and third most expensive in the Americas. Ottawa, Canada is now the most expensive location in the Americas at €91 sq m per year, an increase of 7%. It replaces the San Francisco Peninsula, USA where rents fell 8% relegating it to fifth position. Asia Pacific recorded the largest regional decline with rents down overall by 6.4%. Australia and Singapore had the biggest rental falls at 17% and 16% respectively. Tokyo remains the most expensive location in the region despite rents moving down by 13% over the year. The principal drivers of the region, India and China, both saw rents fall by 8% over the year as a result of lower export demand and a reduction in manufacturing output. Conversely, Indonesia, Malaysia and the Philippines all recorded rises in rents of 3%, 6% and 8% due to a shortage of prime buildings. write your comments about the article :: © 2010 Construction News :: home page |