The Asia-Pacific region has six of the world’s 10 most expensive cities for industrial real estate, leading a recovery in commercial properties, according to CB Richard Ellis Group Inc.
Rents in the region jumped 9 percent in the year ended March 31, with Tokyo the world’s most expensive industrial market, and Singapore, Sydney, Perth, Brisbane and Hong Kong among the 10 priciest cities, the Los Angeles-based commercial real estate broker said in an e-mailed report. London, Sao Paolo, Paris and Amsterdam complete the top 10.
“A constrained industrial supply pipeline and a move by occupiers to achieve cost savings” will drive demand and future rental growth, CBRE Global Chief Economist Ray Torto said in an accompanying media release. “World trade flows have also rebounded and this will be a positive for logistics demand over the medium term.”
Asian container lines have posted increasing profits as economic recoveries in the U.S. and Europe, and demand from China, boosted shipping markets. Rising import levels will continue to contribute to increased demand for logistics centers and warehousing space, CBRE said.
CBRE’s global industrial rent index rose 1.3 percent in the first quarter, the biggest growth since the second quarter of 2007. Rents climbed 2.1 percent around the world in the year ending March 31, the group said.
Still, as consumer confidence globally wavers and unemployment levels remain high in major markets, “the rate of recovery in the sector will continue to be fragile,” CBRE said.