Global Logistics Rents Post 4% Gain

A Prologis facility in the UK. The REIT sees European rent growth outpacing US markets within a few years.

SAN FRANCISCO—Logistics rents rose by 4% globally in 2016, Prologis said Thursday. Not surprisingly, the strongest of the four regions measured in the latest Prologis Logistics Rent index was the US, where rents grew by 5% last year—with the major coastal markets averaging about 150 basis points above the average—and vacancies fell below 5% for the first time. However, the firm notes that Europe is gaining momentum and growth there could outpace the US in the next few years.

With 3% gains across Europe in ’16, rental growth on the continent remains moderate compared to the US, “but is notably ahead of the low inflationary environment,” according to the Prologis report. “The unwinding of lease concessions has been the principal driver of the market rental recovery “across the continent, although there are some softer markets, notably the Paris metropolitan area.