Global rents for logistics facilities will grow by more than five per cent per year from 2014 to 2017, reaching a total increase of 20 to 25 per cent during the four-year period, according to research by Prologis.
Prologis has released a paper titled "Entering the Sweet Spot in the Cycle for Logistics Real Estate: An Extended Rental Rate Expansion”, which provides in-depth analysis of global rents for logistics facilities.
This outlook is supported by a trend in structural drivers and a recovery in operating fundamentals.
"Rents today still don't broadly support new construction, but tightening vacancy rates are reversing that dynamic," says Chris Caton, vice president and head, Prologis Research. "In addition, as replacement costs rise with global economic expansion, we expect the rent required to justify new construction to rise in kind and lead to an extended period of pronounced rent increases, particularly in cyclical recovery global markets in the US and Europe."