British industrial and logistics locations are among the most expensive in Europe with London remaining at the top of the table according to research by international property adviser DTZ, which employs more than 6,550 staff at 125 offices in 33 countries worldwide.
The prime industrial and logistics sector, says DTZ, withstood downward pressures and experienced little change in 2003. London kept poll position with headline rents of Euro 172/sqm/pa (£11.25/sqft/pa) a slight increase of 2.3% year-on-year. Birmingham, Edinburgh and Manchester were all in the top ten with rents standing at Euro 84/sqm/pa (£5.50/sqft/pa) in Birmingham and Edinburgh and Euro 82/sqm/pa (£5.35/sqft/pa) in Manchester.
While year-on-year rents remained stable in Birmingham and Manchester, Edinburgh recorded a decrease in rental levels of -8.3%
Occupier demand for logistics space has generally weakened in most markets across western Europe and availability has continued to increase, says DTZ’s research. However, despite this, prime assets with good infrastructure links have seen only slight or no deterioration in headline rents – although occupier incentives are widespread.
The major central European markets continued to mature over 2003 with rental levels coming under pressure from the increasing supply of speculatively developed space.
Simon Lloyd, European industrial and logistics director at DTZ, comments: “The industrial sector continues to be less volatile than other sectors because of the high concentration of owner occupation and built to suit lettings. As a result we do not expect to see rents rising significantly in 2004 with the market continuing to remain stable in the short term. It will, however, be interesting to see what impact the expansion of the EU will have on the logistics sector in May 2004.”