Asia Pacific bucks global industrial slowdown

THE industrial property market in the Asia Pacific region has remained relatively strong whilst the other global markets are feeling the effects of a slowdown, according to Colliers International's Midyear 2008 Global Industrial report.

Colliers’ commercial research director Felice Spark said the report, which covers 166 markets across Europe, the Middle East, Africa, North America, Latin America and Asia Pacific, found European economies registered a noticeable slowdown in the first half of 2008 with the euro-zone and United Kingdom posting very sluggish growth.

And no surprise the United States and Canadian markets were sluggish, however in western Canada, the sector continued to operate above trend.

The research found Asia Pacific region was the growth leader for the first half of 2008, with China and India leading the way. Port cities remain very active as intra-region trade remains relatively robust.

Warehouse rents in the region vary significantly with Japanese markets, Hong Kong, Seoul and Singapore all posting lease rates in excess of $$US15.00 per sq ft per annum.

Asia Pacific land prices ranked number one and two in the world with Hong Kong at $1,024 per sq ft, Seoul at $625 per sq ft and Tokyo’s Ariake submarket at $416 per sq ft.

Spark said this same pattern is expected to continue for the balance of 2008 and into 2009; although with global economy slowing even the Asia Pacific region will post slower growth.

Meanwhile, London‘s Heathrow submarket was the most expensive warehouse space in the world.
The report found that European warehouse markets continued to show steady growth, albeit down from 2007 levels.

Spain, The Netherlands, Austria, Belgium, Sweden, Denmark and the UK are all anticipating higher yields (lower prices) in the coming months.

For the rest of the EMEA region, however, solid fundamentals are expected to leave yields steady and in some cases possibly decline.

Europe is also home to some of the most expensive warehouse rents in the world with London’s Heathrow submarket holding the title for the most expensive warehouse space in the world at $26.92 per sq ft per year (₤13.50 per sq ft per year).

According to the research, as the US economy continues to cool leasing activity is expected to show a further decrease as the effects of a depressed housing market filter through the general economy.

Reflecting relatively sound fundamentals, however, Colliers International predicts most North American markets should see rents either hold steady or decrease just marginally in the coming months.

Australian Property Journal