SEATTLE-Despite tepid job growth, the demand remains strong for industrial warehouse space and modern distribution centers, and around the world, industrial buildings near full occupancy says Collier's International. London, Hong Kong and Singapore are taking the lead in industrial warehouse rents, as well, according the firm's Global Industrial Midyear 2013 Highlights Report, released this week.

Colliers market experts point to increases in industrial demand, specifically in Asia and the Americas, and highlight causes for sluggish performance in other areas.

“While the North American market has seen solid performance, from a global perspective, industrial market activity has been somewhat patchy through the first half of 2013,” says KC Conway, Colliers' chief economist, USA. “While markets like Hong Kong and Sydney are nearing full occupancy, other markets like Seoul are experiencing uneven industrial demand. Latin America and EMEA are also working to manage some imbalance in supply and demand. Through the end of the year, we expect to see market resilience, increased demand for logistics and distribution center space, and development driven by build-to-suits.”

Modern, Build-to-Suit in High Demand: Institutional investors' anxiety about the multifamily market has spurred demand for modern warehouse properties near ports and inland distribution centers. New space is often build-to-suit for major retailers and manufacturers, as an estimated 40% of existing U.S. warehouse space is old enough to be considered functionally obsolete.
Construction Booming in Mexico: Similarly, Mexico has seen slowed economic growth, and experienced a slight increase in vacancy after several industrial facilities were vacated. However, 14 industrial properties are under construction in the market, and once complete, they will add more than one million square feet of inventory.
South American Market Matures, Moves Away from the City: While Sao Paulo seems to have stabilized, the Bogota market absorbed more than two million square feet of warehouse space in the second half of 2012, which was 28% more than the same period in the previous year.
China Sees Long-Lead Lease Renewals: Long-term, increased consumer demand will drive the need for high-quality logistics properties throughout Asia Pacific industrial sectors. While some construction projects aimed at alleviating growing pains are in the works, several are not expected for completion until 2014.
India Invests in Multi-Brand Retail Trading: Economic growth remained stagnant in India. However, industrial activity is slated to improve after a 51% foreign direct investment in multi-brand retail.

Instant Insights /

Worldwide Industrial Demand Increasing Despite the Slow Economy

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