Despite anaemic job growth, the demand for industrial warehouse space and modern distribution centres remains strong, according to Colliers International's Global Industrial Midyear 2013 Highlights Report. London, Hong Kong and Singapore take the lead in industrial warehouse rents, while around the world, industrial buildings near full occupancy.
The Serbian industrial market cannot be compared with highly developed markets in Europe and the rest of the world. At present, the Serbian industrial market can be characterized as still immature and undersupplied in terms of modern stock.
According to the latest Colliers research, the total stock of modern logistics/warehouse facilities within the Belgrade and the surrounding areas is estimated at about 220.000 sq m inclusive of the space built to the highest international standards as of 2005 and positioned along the E-70 and E-75 highway and within industrial/logistic zones in close proximity to the Belgrade city (Stara Pazova, Dobanovci, Simanovci, Krnjesevci, Ugrinovci).
Due to its central position within the Balkan Peninsula and good traffic infrastructure, representing a very important link between Western Europe and the Middle East, Serbia has a great potential for the development of logistics and the industrial sector.
The demand for industrial/warehouse facilities comes mainly from retailers, wholesalers and manufacturers, predominantly in the food retail distribution chains as well as from distribution and transportation companies that are either present on the Serbian market or about to enter. It is expected that the demand will have an upward trend in the coming years in response to Serbia’s awarded date for the commencement of accession negotiations to the EU and the further expected step up of the economic environment in Serbia.
Since there is already a lack for modern logistics facilities the most acceptable solution for the companies in need would be to find attractive locations and in cooperation with the investors that are ready to share the risk develop adequate built-to-suit industrial/warehouse facilities.
Increased demand in Asia and America, higher rental fees in Germany
Colliers market experts point to increases in industrial demand, specifically in Asia and the Americas, rent increases in Germany and highlight causes for stagnation in other areas.
According to the report, modern, built-to-suit space is in high demand.
- Institutional investors’ anxiety about the multifamily market has spurred demand for modern warehouse properties near ports and inland distribution centers. New space is often build-to-suit for major retailers and manufacturers, as an estimated 40 percent of existing U.S. warehouse space is old enough to be considered functionally obsolete.
The report also underlines prime rent increases in Germany.
- The availability of modern space across Germany is limited, which has driven prime rent increases in major cities. Munich in particular has seen growth among automotive manufacturers, while the high purchasing power in the region has given retailers the opportunity for expansion - the report reads.
Mexico has seen slowed economic growth, and experienced a slight increase in vacancy after several industrial facilities were vacated. However, 14 industrial properties are under construction in the market, and once complete, they will add more than one million square feet of inventory. An additional two million square feet are in the planning stages, and expected to be complete by 2015.
While São Paulo seems to have stabilized, the Bogotá market absorbed more than two million square feet of warehouse space in the second half of 2012, which was 28 percent more than the same period in the previous year. Since 2008, industrial developments have moved toward the city’s outskirts, producing 99 percent of available land. In fact, roughly 570 acres of land are available in the market – the highest ever recorded.
China sees long-lead lease renewals. Long-term, increased consumer demand will drive the need for high-quality logistics properties throughout Asia Pacific industrial sectors. While some construction projects aimed at alleviating growing pains are in the works, several are not expected for completion until 2014. As a result, many logistics companies, for example in Hong Kong, have had to negotiate with landlords for lease renewals about one year ahead of lease expiration.
Economic growth remained stagnant in India. However, industrial activity is slated to improve after a 51 percent foreign direct investment in multi-brand retail trading goes into effect, along with the government-proposed National Investment and Manufacturing Zones.
A full version of the 23-page report, including a list of the top 10 industrial warehouse rents and cap rate averages around the world, is available by clicking here.