Modern Logistics Real Estate Remains Dear, Says Prologis

The index will track trends in net effective rents in the 57 major markets around the world where Prologis has a presence and offer a consistent year-over-year comparison of global trends in logistics property rents.

By Patrick Burnson, Executive Editor

April 21, 2016

Prologis, Inc., the San Francisco-based global industrial real estate giant, recently announced the release of its first annual Prologis Logistics Rent Index.

The index will track trends in net effective rents in the 57 major markets around the world where Prologis has a presence and offer a consistent year-over-year comparison of global trends in logistics property rents.

“The Prologis Logistics Rent Index provides much-needed trending information to our customers, investors and the broader logistics real estate community,” said Chris Caton, Prologis’ Global Head of Research. “It is unique in that it considers only modern logistics real estate and focuses on net effective rental rates, adjusting for concessions, and brings transparency to the industry.”

Highlights from the 2015 index:

• Global rental rates rose 6 percent in 2015 and are up more than 20 percent since 2012. Vacancies are likely to remain low in the near term, leading to further rent increases in our view.
• In many markets, the combination of improving customer sentiment and limited supply has brought vacancies to their lowest levels on record.
• During 2015, the top five rent growth markets were all in the U.S. and include the San Francisco Bay Area, Chicago, Nashville, Las Vegas and Cincinnati.
• The world’s top five highest rent markets at the end of 2015 were London and Southeast U.K., Tokyo, Singapore, Osaka and the Midlands, also in the U.K.