Three of the world’s top 10 most expensive markets for shed occupiers are now situated in the UK, as robust occupier demand continues to deepen the UK supply crunch.
London Heathrow has retained the top spot as the world’s most expensive industrial market, while Manchester and Glasgow have leapt into the top 10, from 16th and 14th respectively in 2013 to eighth and 10th, according to DTZ’s latest research. Birmingham took 11th place, up from 17th a year ago.
The Heathrow market presently costs $342.30 per sq m (£20 per sq ft) to occupy, ahead of second-placed Hong Kong’s $299 per sq m and third-placed Zurich at $243.10 per sq m.
Occupiers in Heathrow and Dublin are also forecast to face the strongest absolute cost growth in Europe, with Dublin facing a 5% annual increase between 2014 and 2018 after a steep decline.
London costs, meanwhile, are expected to exceed $360 per sq m by 2018, cementing its position as the most expensive global market. This is despite coming under pressure from Hong Kong, where costs are expected to rise
by 8.14%.
In Europe – the most expensive continent – the average increase will be 1.66% between 2014 and 2018, compared with 1.93% globally.
Over the past five years European occupancy costs shrank by 0.54% compared with a 0.18% decrease in the US, while global costs rose by 0.21% and the Asia-Pacific average occupation cost rose by 2.58%.
UK markets, including Leeds and Birmingham, are also expected to outstrip average growth.
DTZ global head of occupier research, Richard Yorke, said: “It is partly a reflection of the UK doing relatively well compared with the rest of Europe in GDP growth terms, which should continue next year. But we’re also seeing big structural shifts – there’s an increase in demand in e-tailing, postal delivery and courier-type services being disproportionately felt in the UK, and there’s very little new development.”
