CANNES – March 11, 2008. London Heathrow again topped this year’s list of the world’s most expensivemarkets. The list, part of Cushman & Wakefield’s 2008 report, was released at the annual conference of MIPIM, Industrial Space Across the World.
London Heathrow, with its rents of US $28.90 per sq. ft., was followed by Dublin, Ireland in second place, up two spaces from last year, and Tokyo, which came in third.
“The effect of the opening of Heathrow airport’s new Terminal 5 in March 2008 has been relatively muted so far, although it does add to the continuing pressure on supply in the airport area,” says Kevin Storey, head of industrial space for Cushman & Wakefield in the U.K. “There is an availability of smaller, second-hand units in the general area, but large sites or units are few.”
Mumbai rose the fastest of any world market on the ranking, leaping from the No. 26 slot in 2007 to 11th place this year. The shortage of product at a time when India’s economic growth is strong has led to increased rents in the industrial sector. Mumbai’s rents rose 94% last year in local currency. Istanbul came in second with rent increases of 60% from January 2007 to December 2007. The San Francisco Peninsula, the only U.S. market to break into the Top 10, ranked No. 7 with rent increases of 29.15%.
Globally, rents increased by an average of just over 6% in 2007, with South America boasting growth of 25%. While European cities accounted for seven of the 10 top locations in the ranking, growth was just 2.5% in 2007. “We are seeing a two-speed Europe: Western Europe had an average rental growth of only 1.3% last year, while Central and Eastern Europe motored ahead at 7%,” said Steven Watt, head of Pan-European logistics and industrial for Cushman. The Central and Eastern European market was fueled by distributors and manufacturers attracted by lower costs. Watt also noted that there is now increasing interest in Romania and future hotspots to watch include Turkey and Ukraine.