Asia Pacific warehouse demand is expected to take a dip due to the impact on the regional trade after the March 11 earthquake and tsunami in Japan
May 2, 2011, Bangkok – Colliers International recently released the Global Industrial Highlights – Second Half 2010, with Asia Pacific emerging yet again as the most robust region, North America registering a pick-up in leasing activity while Europe, Middle East and Africa (EMEA) reported a modest growth.
In terms of warehouse rental, Tokyo topped the world at USD 22.56 as of end 2010. This is followed by London – Heathrow, Zurich, Hong Kong and Geneva – the global top five industrial warehouse rentals.
In the second half of 2010, exports in many countries posted encouraging growth rates, with healthy economic growth in the region and exporters boosting sales both within the region and globally. Asia Pacific continued to be the world’s most robust region. Across most markets in Asia Pacific, warehouse rentals were steady or in upward swing. Tokyo’s warehouse rentals were the highest at the end of 2010, followed by Hong Kong and Singapore at the 4th and 7th spot respectively.
Thailand witnessed a continued surge in industrial estate activity over the course of 2010 with an additional supply of 8,914 rai (3,523 acres) of Serviced Industrial Land Plots being added to the market.
However, with Japan’s devastating earthquake on March 2011, trade across the region will feel some effects with demand for warehouse space in the region expected to be sluggish compared to 2010. Disruptions in the supply chain have been felt in Thailand, a strong manufacturing base for Japanese companies. However over the medium and long term Thailand is expected to benefit as Japanese multinationals consider moving more production away from its own shores.
Both the United States and Canadian warehouse market registered a noticeable pick-up in the second half of 2010. Warehouse demand in the United States was concentrated in a number of port-related markets, while in Canada, most markets recorded a fairly brisk period in the second half of 2010. Meanwhile, with a return of demand and continued drop-off in construction, vacancies in Canada and the United States decreased.
Amid signs of economic recovery in both countries, occupancy gains are expected to be sizeable in 2011 given healthy gains in manufacturing and a continued bounce-back in consumer spending. However, rentals are expected to remain largely directionless this year. Taking the second half of 2010 as an example, rental in United States fell 2.9% while those in Canada increased marginally by 0.2%.
In EMEA, various markets were characterised by sluggish leasing activity and little expansion. Warehouse rentals again kept steady in the second half of 2010, similar to the first six months in the year, although Europe is home to some of the most expensive warehouse rentals in the world. For example, London – Heathrow, Zurich and Geneva were included in the top five most expensive warehouse rentals in the world.
London – Heathrow not only registered the most expensive warehouse rentals in EMEA, its prime industrial land prices at USD 56.82 per sq ft was the highest in the region and remained far in excess of any other markets in EMEA.