Singapore has emerged as the fourth most expensive logistics market in the world, with prime logistic rent at US$10.14 psf per annum in Q1 2017, revealed a CBRE report.
Topping the list was Hong Kong with prime logistic rent at US$32.40 psf per annum, followed by Tokyo and London with rent at US$18.22 and US$17.86 psf per annum, respectively.
Also on the top 10 list are Shanghai, Stockholm, Sydney, Shenzhen, Oakland and Los Angeles / Orange County.
“Singapore’s prime logistics markets commands one of the highest rentals amongst other major hubs, chiefly because its port is still one of the region’s most competitive. A high volume of transhipment activities prop up the rentals of the warehouses which support third party logistics activity. This presents the Republic as a very attractive logistics hub,” said Dennis Yeo, managing director for industrial & logistics at CBRE, in explaining Singapore and Hong Kong’s ranking.
However, Brenda Ong, CBRE’s executive director for industrial & logistics, noted that the city-state’s logistic market is “overshadowed by a supply overhang”. In fact, the completion of several large prime logistic facilities led to an 11 percent year-on-year increase in prime logistics space monitored by CBRE.
And with landlords lowering rates to retain tenants, prime logistic rents dropped 6.3 percent in Q1 2017. But as more logistics space is absorbed, Ong expects prime logistics rents to begin to stabilise next year.
Hong Kong’s most expensive rents, on the other hand, are a result of an undersupply situation, said Yeo.
“It is an important gateway city for cross border shipments outside of China. China leverages Hong Kong’s prime logistics infrastructure to support its flourishing e-commerce networks regionally and around the globe,” he said.