London is the most expensive location in the world to take warehouse space in, reveals the latest data from Savills.
The cost of prime space in the capital is (US) $42/sq ft, including rent, service charges and taxes, 50% more than in the second most expensive location of Sydney, where it costs $27.50/sq ft.
Sydney leapfrogged Hong Kong into second position in Savills World Research’s annual analysis of 52 markets, while Los Angeles was ranked third ($27/sq ft) and Hong Kong dropped to fourth place ($26/sq ft).
The total cost of occupancy globally grew 10.1% in the 12 months to June 2023, exceeding the 8% annual increase recorded between 2021-22. In H1 2023, total costs increased 4.4% compared with a 5.4% rise in H2 2022.
Paul Tostevin, director in Savills World Research, said: “While the rate of warehouse property cost increases may be decelerating, higher costs are here to stay. Nonetheless, even in the currently cheapest locations, in the long term, population growth and structural trends are likely to fuel demand for goods and services, and in turn warehouse requirements; this applied not only to developing economies, but in the growth hotspots of developed ones. That only increases occupier emphasis on the best located, most efficient warehousing space, underpinning demand for prime warehouses and in turn future rental growth.”
