Trade FlowsBolster IndustrialDemand in Asiaand the Americas> Despite anemic U.S. job growth, demand for North American industrialwarehouse space and modern distribution centers remains strong.In Q1 2013, the North American vacancy rate declined for the eighthstraight quarter, down 20 basis points to 8.20%. Canada’s vacancy ratestands at 4.13%.> Thanks in part to a recent drop in exports to the United States, Mexicohas seen slowing economic growth. In Q1 2013, several Mexico Cityindustrial warehouses were vacated, slightly increasing the vacancyrate to 3.49%.> While occupier demand for industrial property in Brazil remains strong,the market now appears to have stabilized into a more rational mode ofsustained growth. São Paulo has seen positive net absorption, in spiteof the final tally in 2012 showing a 23% decrease over the previous year.> Demand for Beijing’s logistics properties remained as strong as it hasbeen since 2011. Rents grew by 11.41% year-over-year as of the end ofQ1 2013. Shanghai’s industrial sector remained stable, with averageasking rents for ground floor premises of high quality facilities in boththe logistics and workshop sectors unchanged.> In Hong Kong, high quality warehouse buildings are nearly fullyoccupied. Those users seeking to expand or rationalize their real estatecosts have had to consider the option of split operations in lowerquality buildings.> Indian economic growth remained sluggish through the end of 2012,however we expect industrial activity to improve, thanks to recentgovernment actions. These include the government-proposed NationalInvestment and Manufacturing Zones and the newly approved 51%foreign direct investment in multi-brand retail trading.Global | Industrial | Midyear 2013HIGHLIGHTS* December 2013 Rent (USD/PSF/YR)** Local currencyGlobal Top 10 Industrial Warehouse Rents*6-Month Change in Rent**LONDON (HEATHROW)HONG KONGSINGAPORETOKYOOSLOGENEVAPARISHELSINKIMINSKSYDNEY21.9521.8321.0220.6120.0416.2014.7014.7013.2313.23MINSKOSLOSINGAPORESYDNEY11.1%3.9%2.2%12.5%PARISHELSINKIGENEVATOKYOHONG KONGLONDON- (HEATHROW)LEGENDEMEAAPAC
2 Global Industrial Report | Midyear 2013 | Colliers International> Industrial take-up across the UK fell by 6% year on year in 2012 butdespite steady, if unspectacular, levels of demand for big sheds,availability continues to fall across all regions. Based on average take-uplevels over the past decade, total availability of new or refurbished spacerepresents just over two years of supply across the UK as a whole.> Munich has seen growth among automotive manufacturers andsuppliers, which are heavy users of logistics and production space.> In Paris, a decline of household consumption and industrialproduction against a backdrop of rising production costs and a loss ofcompetitiveness of manufacturing companies have not helped the largewarehouse market. Take-up of large warehouses in France through 2012stood at 5.2 million square feet, down 24% from 2011.North AmericaStrong Demand in North American Port andDistribution MarketsDespite anemic U.S. job growth, demand for industrial warehouse spaceand modern distribution centers remains strong. On the heels of nearly71 million square feet of net absorption in Q4 2012, the market absorbedanother 50.5 million square feet in Q1 2013. The North American vacancyrate declined for the eighth straight quarter, down 20 basis points to8.20%. Canada’s vacancy rate stands at 4.13%. Vacancy has improved themost in primary port cities and inland distribution markets with largeintermodal facilities.Cap rates continue to compress and warehouse prices have risen. Asinstitutional investors become anxious about the multifamily market,demand for modern warehouse properties in core port and inlanddistribution markets grows.
3 Global Industrial Report | Midyear 2013 | Colliers Internationalslowing economic growth in 2013. We expect this situationto be temporary as demands from American consumers andbusinesses return. A relatively slow but steady growth shouldcontinue, accompanied by further industrial property demand.During Q1 2013, several Mexico City industrial warehouseswere vacated, slightly increasing the vacancy rate to 3.49%. Inthat period there were 14 Class A industrial properties underconstruction in the market. Once complete, they will add overone million square feet of inventory. There are an additional twomillion square feet in the planning stages, which will deliverbetween 2013 and 2015. We expect occupier demand combinedwith the dearth of speculative construction—all but four of theprojects under construction are build-to-suit—will ensure thatthe vacancy rate remains stable.Brazil’s Industrial Market Matures While occupier demand for industrial property in Brazil remainsstrong, the market now appears to have stabilized into a morerational mode of sustained growth. Prices are not increasingwith the rapidity that they once were and developers havebecome more conservative, waiting until the inventory underconstruction has been leased before approving new projects.New Supply is picking up, but is neither excessive nor speculative.New industrial construction increased by one-third to 40.6million square feet. But this is less than the quarterly averagenet absorption from Q1 2012 to Q1 2013 (45 million square feet).More than half of this new space is pre-leased or build-to-suitdistribution centers for major retailers and manufacturers.An estimated 40% of existing U.S. warehouse space is old enoughto be considered functionally obsolete. There is added urgencyon the part of retailers and manufacturers remaking their supplychains with modern distribution facilities aligned with keypost-Panamax ports, intermodal rail facilities, and air cargo/e-commerce fulfillment paths.Latin AmericaConstruction in Mexico City, But Little isSpeculativeThanks in part to a recent drop in exports to the UnitedStates, Mexico’s largest export market, the country has seenNorth America, Average Prime Warehouse Rent, (USD/SF/YR) & Cap Rate - December 2012*Note: Average Net rent = Gross Asking Rent - Annual Realty Taxes - Operating ExpensesChicago6.3%$3.71Vancouver, BC5.7%$7.62Detroit9.9%$3.70Los Angeles - Inland Empire7%$4.2Dallas-Ft Worth7.3%$3.15Los Angeles7%$6.21Atlanta7.9%$3.17Indianapolis6.75%$3.67New Jersey - Central6.3%$4.37
4 Global Industrial Report | Midyear 2013 | Colliers InternationalSão Paulo, which makes up 62% of the national industrialinventory, has seen positive net absorption, although the finaltally in 2012 was a 23% decrease over the previous year. Ourexpectations for the city remain positive. Submarkets close tothe Mario Covas Beltway, the city’s ring road, have seen strongdemand and high prices thanks in part to a lack of furtherdevelopable land.Buenos Aires Sees Supply/DemandImbalanceBuenos Aires currently suffers from an imbalanced market.Despite recent construction completions, there are virtually nopremium logistics centers available for rent. This lack of supplyhas hurt demand, as there is simply no supply to meet it. Rentalrates have increased in line with national inflation. There aremany premium logistics projects currently under constructionwhich will come online this year. Industrial parks have alsoshown a high occupancy scenario and an upward trend in landsales prices.Bogotá Sees Strong Demand as UsersMove to City OutskirtsIn Bogotá, warehouse demand exceeds supply. In H2 2012,absorption exceeded new construction by 8%, something thathas not been seen since 2008. Available warehouse space wasdown by 45%. Few of the newly constructed warehouses are evenmaking it to the market, as many properties are either build-to-suit or leased or sold before construction begins. The Bogotámarket absorbed over two million square feet of warehousespace in the second half of 2012, which was 28% more than thesame period in the previous year. Since 2008, development hastransitioned to the city’s outskirts and now 99% of available landis to be found there. There were 570 acres of land available in themarket, which is the highest we’ve ever recorded.Asia PacificConsumers Support Asian IndustrialResilienceThe overall demand for industrial logistics real estate in Asiaremains relatively solid despite the slower-than-projected GDPgrowth in a number of Asian economies and the slackeningdemand for imports in western economies. Thanks to resilientprivate expenditure in a number of Southeast Asian countries,quality industrial logistics properties have been in consistentdemand, especially those catering to local distribution.Rental growth expectations in most Asian cities remain positive.Beijing is the most prominent city with exceptional rentalLATAM, Average Prime Warehouse Rent(USD/SF/YR) & Cap Rate - December 2012Mexico City7.75%$6.25Lima11%$7.25Buenos Aires10.5%$8.81Panama City9.5%$9.48Bogotá9.8%$9.70São Paulo10.25%$10.55growth, due to the accelerating expansion of third-party logisticscompanies and the sustained demand for logistics space due tothe city’s lack of new supply of quality and modern facilities. InHong Kong, supply is falling short of demand where high qualityindustrial logistic warehouses are virtually fully occupied. Thesustained demand for logistic space was lately demonstrated inQ2 2013 by the fact that an industrial/logistic development site inthe Tsing Yi district—a traditional logistics hub in Hong Kong—was sold for a higher than expected land price.Beijing Sees Sustained Demand forLogistics SpaceDemand for Beijing’s logistics properties remained as strong as ithas been since 2011. The vacancy rate rested at around 2.74% asof the end of Q1 2013. On the back of this, rents grew by 11.41%year-over-year, to RMB 35.55 per square meter per month asof end Q1 2013. One new project was completed in Beijing’slogistics property market in Q1 2013, and total market inventoryexpanded to more than 14 million square feet. The demand fromthird party logistics, manufacturing, and pharmacy companiesshould continue to grow. Several new projects are anticipated to
5 Global Industrial Report | Midyear 2013 | Colliers Internationalcomplete in 2013, however this will hardly alleviate the currentdemand. We expect rental and capital values to grow, albeit at alower rate.Consumer Growth Supports ShanghaiLogistics SectorShanghai’s industrial sector remained stable in Q1 2013, despiteglobal economic uncertainty. China’s official PurchasingManagers’ Index (PMI) and the HSBC’s China ManufacturingPMI stood at 50.9 and 51.6 respectively in March, promotingpositive industrial performance. Average asking rental ratesfor ground floor premises of high quality facilities in both thelogistics and workshop sectors remained unchanged from Q42012. In the medium to long term, increased consumer demand,founded on rising disposable incomes and the government’sstated goal of increasing efficiencies in the logistics sector willsustain demand for high-quality logistics properties. In theworkshop sector, the new supply of high quality facilities will belimited by the availability of land.Quality Hong Kong Warehouses NearFull Occupancy In Hong Kong, high quality warehouse buildings are nearly fullyoccupied. No new warehouses are set to complete constructionuntil the second half of 2014. Logistics companies have hadto negotiate with landlords for lease renewals about one yearahead of lease expiration. Some logistics companies have pre-committed those yet-to-be-vacated spaces. Those users seekingto expand or rationalize their real estate costs have had toconsider the option of split operations in lower quality buildings.This trend will continue until developers have completedwarehouse construction in the Tsing Yi district.Japanese Exports ImprovingJapan’s real GDP grew for two consecutive quarters by 0.9%quarter-over-quarter or 3.5% annualized in Q1 2013. The exportsstopped decreasing. The Yen depreciated against USD more than15% since the end of 2012. The decline of industrial land pricesAsia Pacific, Average Prime Warehouse Rent (USD/SF/YR) & Cap Rate - December 2012Jakarta9%$4.37Singapore4.5%$21.02Tokyo6.2%$20.61Adelaide8.25%$11.98Beijing6.88%$6.04Sydney8%$13.23Wellington8.5%$5.99Hong Kong4.1%$21.83Auckland7.79%$8.14Brisbane8.41%$10.73*Gross rent data listed for Tokyo
6 Global Industrial Report | Midyear 2013 | Colliers Internationalin Greater Tokyo during 2012 was less than that of 2011, -0.5%compared with -1.8%.Demands from rapidly growing e-commerce sectors andexpanding Third Party Logistics users are strong. Both domesticand foreign investors have been active in the industrial propertymarket and we expect this trend to continue. Three JapaneseREITs that mainly target industrial properties were newly listedbetween November 2012 and February 2013. Only five of thethirty-nine Japanese REITs have industrial properties holdings.These holdings make up about 7.5% of total holdings.Seoul Sees Uneven Industrial DemandSeoul has seen a decrease in transaction volume. This has meantthat there was no significant change in rent or asset value in thesecond half of 2012. Recent industrial sales trends have includedthe sales of properties in order to secure cash flows. Sale/leasebacktransactions are also on the rise. The market has also witnessedmany cases of PF transfer of ownership of real estate in additionto the sales of factory sites for redevelopment into large-scaleresidential projects. So while there have been some significantindustrial sales, many were transactions where property usage waschanged rather than actual industrial investment.Sellers’ Stamp Duty Likely to Rein inSales Price Growth in SingaporeAverage capital values of strata-titled warehouses continuedto rise in H2 2012. This was supported by high liquidity, lowinterest rates and investor demand which had diverted from theresidential market where several rounds of cooling measureswere implemented.Strong demand for industrial sites pushed land values upwardsin H2 2012 after having remained stable in H1 2012. Rents forboth prime warehouse space and prime bulk space improvedfurther, driven by lease renewals and higher rental expectationsfrom landlords.We expect demand for warehouse space to remain healthy in2013. However, warehouse rents and capital values will rise at aslower pace. The imposition of a Sellers’ Stamp Duty (with effectfrom 12 January 2013) on industrial properties sold within threeyears of purchase to weed out speculative activity is likely to reinin industrial property prices.Government Actions to Propel DelhiIndustrial Activity Indian economic growth remained sluggish through the end of2012, however we expect industrial activity to improve thanksto recent government actions. The government has proposedsetting up eight National Investment and Manufacturing Zones(NIMZs), which are integrated industrial townships with state-of- the-art infrastructure and at least 30% of total area devotedto manufacturing. Of the eight proposed NIMZs, three would belocated in the Delhi National Capital region.The cabinet has also approved 51% foreign direct investmentin multi-brand retail trading, subject to certain conditions. Inlight of these proactive measures, we anticipate an increase indemand for industrial properties over the coming year, with mostsubmarkets experiencing stability or growth in values and rentson the back of consistent demand and limited space availability.
7 Global Industrial Report | Midyear 2013 | Colliers InternationalSydney Industrial a Target for ForeignCapitalSydney’s industrial market continues to attract offshore capitalwith a number of foreign groups inquiring and purchasingindustrial assets and teaming up with local institutional owners.The weight of funds chasing Prime Grade assets has seen PrimeGrade yields show signs of tightening. The attraction to Sydney’sindustrial market from investors continues to be driven bystrong fundamentals with tenant demand for Prime Grade assetsremaining active. However the ongoing lack of supply combinedwith demand has kept availability and vacancy levels low.Melbourne’s West Still Seeing StrongDemand from Logistics SectorThe Melbourne industrial market continues to be dominatedby leasing and development activity in the west precinct, andit continues to be the logistics and transport sector that isdemanding the majority of industrial space. Both the North andWest markets are seeing good demand from this sector, andenquiries are predominately coming from logistics users involvedin the supply chain process coming out of the Port of Melbourne(west) and Melbourne Airport (north).Investment Activity Slows in BrisbaneInvestment activity has eased in the first half of 2013 with sixtransactions over $5 million, which is down from 15 transactions inthe second half of 2012. This is mainly reflective of a lack of availablestock on the market. Leasing activity has improved with 360,892square feet of industrial floor space taken up during the first halfof 2013 compared to 285,433 square feet in the latter half of 2012.With new supply additions at low levels (104,986 square feet of newindustrial floor space for facilities over 32,808 square feet currentlyin construction phase) and demand at trend levels, prime grade netface rents are forecast to grow 1.8% in 2013 from 2012 levels.HONGKONGSINGAPORETOKYOORANGECOUNTY,CASANJOSE-SILICONVALLEYVANCOUVER,B.C.FRANKFURTOSLOLONDON(HEATHROW)BOGOTÁPANAMACITYMEXICOCITY9.801.00.02.03.04.05.06.07.08.0NORTH AMERICA EMEA LATIN AMERICAASIA9.010.0 %4.104.505.706.00 6.006.20 6.256.506.707.759.509.80Top Three Markets by Cap Rate (%) and Region - December 2012
8 Global Industrial Report | Midyear 2013 | Colliers InternationalAdelaide Sees Shortfall in Quality Stock Leasing demand remains solid, and with a number of majortenants currently in the market with requirements unfulfilled,this trend will continue. The shortfall in A Grade stock will drivepre-lease demand for design and construct development andthe redevelopment of older style buildings. Expect moderaterental growth in 2013 through limited supply of A Grade stock.Institutions are now making strategic purchases and have beenselling non-core assets. Expect modest yield compressionfrom Q2 2013 when transactional activity for the year is wellunderway. 2013 should see some expansion in values, especiallyin traditional core precincts.Expect Prime Yields to Firm inAuckland Industrial market activity in Auckland was patchy in 2012, withfew design build projects undertaken. As difficult economictimes continue, businesses are tending to defer expenditures,including property expenditures, choosing instead to concentrateon sustaining their core business. We expect overall vacancy willtrack modestly down through 2013 but there will be considerablevariation between parts of the market, whether in the contextof location, quality or building size. As construction costs areexpected to increase, particularly as tenants and developers paymore attention to seismic aspects of the building code, rentswill have to increase or land costs decline in order to provideowners and developers with the returns that they have beenenjoying historically. It is likely that demand for good qualityindustrial investments will continue to outstrip supply, and thiswill continue to be the case until more supply is produced. As aconsequence prime yields are continuing to firm.Many Wellington Tenants Attracted toSmaller, Newer Space In Wellington there is a trend for businesses to move from older,larger space to newer, smaller, more efficient space, leaving asignificant number of large premises vacant. These are typicallyhard to re-utilize without significant capital expenditure.Industrial leases in Wellington tend to be documented on agross basis, as do office and retail leases in the capital. Currentlythis favors tenants as rising insurance premiums cannot beimmediately passed on to them. While gross rentals have notreduced, net rentals have dropped slightly as a result of risingoperating expenses, particularly insurance costs. We anticipatethat insurance premiums will continue to rise in the next twelvemonths and as a consequence, net incomes will continueto decline. Leasing activity has been steady and we expect acontinuation of this modest level of activity.Europe, Middle East& AfricaLimited Supply of Quality Space inEMEARecovery in the European Logistics market remains generallypatchy, reflecting a lack of momentum in retail trade andindustrial production growth, two of the primary drivers of themarket. After a modest pick up towards the start to the year, retailtrade volume growth flattened in both Europe and the Eurozone,and remains negative on an annual basis. Industrial productionmarked its second consecutive monthly increase in March, butthe annual trend is also downward. Sentiment in the industrialsector was also dented by a fresh downgrade of growth forecastsfor some larger European economies.Generally, the market in Europe continues to be characterizedby limited supply of quality space and hardly any speculativeprojects under construction. This situation, along with stabledemand levels, leaves many occupiers with limited choice ofmodern developments.
9 Global Industrial Report | Midyear 2013 | Colliers InternationalPre-lease agreements continue to have a significant share in take-up figures in some of the markets (e.g. Poland). However, manytenants are withholding their decisions because of the uncertaineconomic outlook and the lack of immediately available space.Prime rents remained broadly unchanged across the majorityof the markets, with some increases observed in core Europeanlocations, mainly on the back of the growing lack of modernsupply. By contrast, rental values remain under pressureacross most parts of Southern Europe, where demand remainsrestrained by poor economic performance.Some markets are benefitting from the further expansion ofE-Commerce, with new e-fulfillment centers built across theregion. Amazon for example is soon to open two new distributioncenters in Northern France and Northern Italy.Steady Absorption and Little NewSupply in London HeathrowOverall industrial take-up across the UK fell by 6% year-on-yearin 2012 but despite steady, if unspectacular, levels of demand forbig sheds, availability continues to fall across all regions. Basedon average take-up levels over the past decade, total availabilityof new or refurbished space represents just over two years ofsupply across the UK as a whole. In London, the figure hasslipped below 1.5 years for the best space and is only marginallyhigher for all Grades. Opportunities for potential occupiersseeking top quality, modern shed space in Greater London arenow severely limited with only very modest levels of new supplyanticipated over the next 18 months.The Heathrow market over the last four years has seen almostno speculative development, which is a direct consequence ofthe current economic climate and is the same situation that isprevailing throughout the rest of the South-East, WestLondon, and the rest of the UK. Consequently, there is verylittle grade A stock available and therefore understandably anumber of build-to-suit lettings have been concluded within thelast twelve months. Steady absorption of space coupled with ashortage of new space coming to market, has meant a downwardmovement in vacancy levels across many London submarketsover the past three years.German Market Resilient; Munich SeesAuto Occupier Logistics Demand The German logistics market has been only marginally affectedby the economic difficulties gripping the Eurozone. Theavailability of modern space is tight across the whole market andthis has recently driven increases in prime rents in some citiessuch as Dusseldorf, Stuttgart and Munich. The Munich market isin particularly good shape.Satisfactory take-up figures above the long-term average havecombined with ongoing high demand to keep the situation onthe demand side solid, even in times of economic uncertainty.In particular, further growth has been noted among automotivemanufacturers and suppliers, which are heavy users of logisticsand production space, while high purchasing power in the Munichmetro area has given retailers opportunities for expansion. Theongoing shortage of space in the latest generation will continueto lead to high advance leasing activity in development projectsthis year, so large-scale signings are expected again. With all thesefactors in mind, we believe the market will be able to pick upwhere it left off, achieving as much as 918,635 square feet in totaltake-up of space by the end of the year.Paris Logistics Market Suffers fromCompetition from Southern PicardyDecline of household consumption and industrial productionagainst a backdrop of rising production costs and a loss ofcompetitiveness of our manufacturing companies have nothelped the large warehouse market. In contrast, the sharp rise ine-commerce has increased logistic property needs. Despite thesestimulating factors, urban logistics is struggling to establish itselfin France. Take-up of large warehouses in France through 2012stands at 5.2 square million feet, down 24% from 2011. However,Global Industrial Capitalization Rates /(Prime Yield/Percent)MARKET (Select Markets) REGIONDEC2012DEC2011Vancouver, BC N.A. 5.70 7.00London (Heathrow) EMEA 6.00 6.00Chicago, IL N.A. 6.30 6.50Munich EMEA 6.90 6.90Los Angeles - Inland Empire,CAN.A. 7.00 6.50Paris EMEA 7.00 6.80Marseille EMEA 7.20 7.20Dallas-Ft. Worth, TX N.A. 7.30 7.60Sydney Asia Pacific 8.00 8.15Madrid EMEA 8.25 8.50Prague EMEA 8.25 8.50Athens EMEA 10.00 9.00Bucharest EMEA 10.25 10.00
10 Global Industrial Report | Midyear 2013 | Colliers Internationaldeals above 131,233 square feet accounted for 35% of the annualtake-up, and this trend towards a concentration of flows in largescale logistics buildings should increase over the next few years.Ile-de-France undeniably posted the year’s most disappointingperformance, with take-up of only 2.2 million square feet, downby 25%. Although the Paris region retains the lion’s share (42%) ofthe French logistics market, it has suffered more from competitionfrom southern Picardy, which is close to the capital and almosttrebled its take-up year-on-year in 2012. The light industrialpremises market in Ile-de-France has defied the sluggisheconomic indicators. Against all expectations, sales to owner-occupiers in that segment were a main driver of the market.The Netherlands: Southern Hubs FaringWellThe Dutch logistics real estate market is characterized byrelative stability, with some regional variations. Cities in thesouth of the Netherlands are generally performing well; rentsfor logistics properties in the province of Noord-Brabant haveincreased while yields have improved. The main reason for thisgrowth is the increasing demand for industrial space from thee-commerce sector and the availability of skilled employeesin the region. For the next 12 months this trend is expected tocontinue in Noord-Brabant.By contrast, rents and yields have been reversing in Venlo; thecity seems to be losing ground to cities such as Eindhoven andTilburg that are more successfully meeting the growing demandfor logistic space. Another notable trend is the decrease ofrental prices in Rotterdam due to an expansion of supply. AtAmsterdam Schiphol Airport there has also been an increasein supply but this has actually led to an increase in rents; thedifference can be explained by the open market in Rotterdamand the airport-bound market in Schiphol.Development activity remains generally subdued and driven bybuild-to-suits. This has resulted in a limited availability of ClassA warehouses. Occupiers on their side are holding on decisionsregarding any relocations and only moving when absolutelynecessary.EMEA, Average Prime Warehouse Rent (USD/SF/YR) & Cap Rate - December 2012Paris7%$14.7Manchester7.5%$9.35Brussels6.75%$6.10Frankfurt6.7%$9.56Warsaw7.75%$7.65Bucharest10.25%$6.18London (Heathrow)6%$21.95Athens10%$6.32 Istanbul9%$6.97Moscow10.5%$13.05Antwerp7%$5.59Stockholm6.75%$12.42
11 Global Industrial Report | Midyear 2013 | Colliers InternationalOther trends in the logistics market are an increase in thedemand for large logistics buildings, driven by both theexpansion of e-commerce and sites consolidation. With theincreasing demands from e-commerce, it is noteworthy that thesouth of the Netherlands is currently withstanding heavy rivalryfrom Belgium, the German Ruhr area and the north of France.Economic Crisis Taking its Toll on theSpanish Logistics MarketThe Spanish industrial and logistics real estate market has feltthe effects of the economic and financial crisis. Investmentvolumes and transactions number have fallen significantly, whilethe general downward pressure on rents remains. However,certain sub-markets are finding a degree of stability i.e. primelocated and specified units over 20,000 sq m. The decrease inconsumer spending has led to a logical decline in retail demandand, in turn, reduced the demands for space from industrial andlogistics operators. Financial constraints have determined a lackof investment activity from small and medium companies who,traditionally, have sought opportunities for owner occupation.Liquidity constraints have resulted in the closure and decline ofmany Spanish developers, and speculative projects have virtuallydisappeared; any new developments are exercised purely on aturnkey basis.Rents for logistics space continue to decrease in all sectors, albeitnot as sharply as previously seen. This trend is being exacerbatedin secondary locations due to high levels of obsolete and vacantstock. Rental levels in Madrid and Barcelona have been adjustedby approximately 15 to 20% in prime sub markets; in secondarylocations the figure is 25 to 35%, and even more in areas withboth dated stock and high vacancy levelsActivity in CEE Driven by Pre-Lets andBuild-to-SuitsActivity remains concentrated around the larger centers ofpopulation and economic strength, with markets such asMoscow, Warsaw, Prague and Budapest providing the largestvolumes of modern stock.Aside from these key city locations, there is a clear clusteringof activity around the industrial regions of Poland, the CzechRepublic and Slovakia. These locations benefit from proximityto their feeder markets in Germany and Austria in particular,helping drive demand for space from regional distributors,manufacturers and retailers as well as those facilitating thenational market.Outside of these locations, only Athens, St Petersburg andGdansk (Tricity) have a wider distribution role to play as majorEuropean trading ports, which escalates the volume of activity inthese specific markets. Gdansk and St Petersburg are yet to fulfilltheir potential.Elsewhere, demand for space is driven primarily by occupierswith local and national distribution needs to satisfy thedomestic economy. Generally, given the lack of new speculativedevelopment, in most markets pre-lets and built-to-suits makeup a large share of new transactions.Prime rents are stable in the majority of the markets. However,some increases were recently registered in Prague, Budapest andBratislava’s region. A minor correction was observed in Athens.
12 Global Industrial Report | Midyear 2013 | Colliers InternationalINDUSTRIAL SURVEY / LOCAL MEASURE / CURRENCY RENTSMARKET COUNTRY CURRENCYUNIT OFMEASUREMENTTIME PERIODPRIME WAREHOUSERENT (LOCALMEASURE / CURRENCY)6-MONTH CHANGEIN RENT (LOCALCURRENCY)PRIME BULKRENT (LOCALMEASURE /CURRENCY)ASIA PACIFICAdelaide Australia AUD SM Year 124.00 3.3% 87.00Brisbane Australia AUD SM Year 111.07 0.0% 82.86Sydney Australia AUD SM Year 137.00 2.2% 103.00Beijing China RMB SM Month 33.75 4.5% 30.38Guangzhou China RMB SM Month 31.95 1.4% 30.40Hong Kong China HKD SF Month 14.10 0.0% 12.48Shanghai China RMB SM Month 37.00 2.8% 33.00Delhi India INR SF Month 34.00 0.0% 33.00Jakarta Indonesia IDR SM Month 38,400.00 3.2%Tokyo Japan JPY SM Month 1,600.00 0.0% 1,700.00Auckland New Zealand NZD SM Year 106.00 0.0%Christchurch New Zealand NZD SM Year 93.00 1.1%Wellington New Zealand NZD SM Year 78.00 0.0%Singapore Singapore SGD SF Month 2.14 3.9% 1.45Seoul South Korea KRW SM Month 10,053.00 0.0% 10,053.00Bangkok Thailand THB SM Month 200.00 0.0% 170.00Chonburi Province Thailand THB SM Month 170.00 3.0% 130.00Ho Chi Minh City Vietnam USD SM Month 4.00 5.0% 2.50EUROPE, MIDDLE EAST, AFRICAVienna Austria EUR SM Month 5.00 0.0% 4.90Minsk Belarus EUR SM Month 9.00 12.5%Antwerp Belgium EUR SM Month 3.80 1.3% 3.35Brussels Belgium EUR SM Month 4.15 -1.2% 3.30Sofia Bulgaria USD SM Month 3.80 0.0%Zagreb Croatia EUR SM Month 5.00 0.0%Prague Czech Republic EUR SM Month 4.50 0.0%Copenhagen Denmark DKK SM Year 450.00 0.0% 450.00Tallinn Estonia EUR SM Month 4.80 0.0%Helsinki Finland EUR SM Month 10.00 0.0% 7.50Bordeaux France EUR SM Month 4.58 0.0% 3.92Lille France EUR SM Month 4.60 0.0% 3.50Lyon France EUR SM Month 5.90 -4.8% 4.16Marseille France EUR SM Month 8.00 0.0% 3.75Paris France EUR SM Month 10.00 0.0% 6.00
13 Global Industrial Report | Midyear 2013 | Colliers InternationalINDUSTRIAL SURVEY / LOCAL MEASURE / CURRENCY RENTSMARKET COUNTRY CURRENCYUNIT OFMEASUREMENTTIME PERIODPRIME WAREHOUSERENT (LOCALMEASURE / CURRENCY)6-MONTH CHANGEIN RENT (LOCALCURRENCY)PRIME BULKRENT (LOCALMEASURE /CURRENCY)Toulouse France EUR SM Month 5.80 -7.2% 3.75Berlin Germany EUR SM Month 5.60 -1.8% 4.20Düsseldorf Germany EUR SM Month 5.50 10.0% 4.00Frankfurt Germany EUR SM Month 6.50 0.0% 6.00Hamburg Germany EUR SM Month 5.80 0.0% 5.80Munich Germany EUR SM Month 6.30 1.6% 5.50Stuttgart Germany EUR SM Month 5.50 3.8% 6.30Athens Greece EUR SM Month 4.30 0.0%Budapest Hungary EUR SM Month 4.50 12.5%Dublin Ireland EUR SM Month 5.00 0.0% 4.50Riga Latvia EUR SM Month 4.00 14.3%Vilnius Lithuania EUR SM Month 4.80 4.3%Amsterdam Netherlands EUR SM Month 6.25 -0.8%Oslo Norway NOK SM Month 100.00 11.1% 85.00Katowice Poland EUR SM Month 3.40 0.0%Lodz Poland EUR SM Month 4.00 0.0%Warsaw Poland EUR SM Month 5.20 -3.7%Gdansk Poland EUR SM Month 3.60 -7.7%Poznan Poland EUR SM Month 3.50 -2.8%Lisbon Portugal EUR SM Month 5.00 -4.8% 3.25Bucharest Romania EUR SM Month 4.20 -4.5%Moscow Russia USD SM Month 11.67 -0.3%Saint Petersburg Russia USD SM Month 10.20 0.0%Bratislava Slovakia EUR SM Month 3.70 -5.1%Madrid Spain EUR SM Month 5.00 -5.7% 3.00Gothenburg Sweden SEK SM Year 650.00 0.0% 550.00Malmo Sweden SEK SM Year 550.00 0.0% 530.00Stockholm Sweden SEK SM Year 870.00 0.0% 550.00Geneva Switzerland CHF SM Month 13.30 0.0% 10.40Istanbul Turkey USD SM Month 6.25 4.2% 6.25Belfast UK GBP SF Year 4.00 0.0% 4.00Birmingham UK GBP SF Year 5.75 0.0% 5.50Bristol UK GBP SF Year 7.00 0.0% 5.50Edinburgh UK GBP SF Year 7.00 0.0% 4.50Glasgow UK GBP SF Year 6.00 0.0% 5.00
14 Global Industrial Report | Midyear 2013 | Colliers InternationalINDUSTRIAL SURVEY / LOCAL MEASURE / CURRENCY RENTSMARKET COUNTRY CURRENCYUNIT OFMEASUREMENTTIME PERIODPRIME WAREHOUSERENT (LOCALMEASURE / CURRENCY)6-MONTH CHANGEIN RENT (LOCALCURRENCY)PRIME BULKRENT (LOCALMEASURE /CURRENCY)Leeds UK GBP SF Year 5.50 0.0% 5.00London (Heathrow) UK GBP SF Year 13.50 0.0% 12.00Manchester UK GBP SF Year 5.75 0.0% 4.25Kyiv Ukraine USD SM Month 7.00 0.0%LATIN AMERICABuenos Aires Argentina USD SM Month 7.90 5.8% 7.50São Paulo Brazil BRL SM Month 19.38 -1.0% 21.90Bogotá Colombia USD SM Month 8.70 -13.0% 5.90Mexico City Mexico USD SM Month 5.60 0.0% 5.60Panama City Panama USD SM Month 8.50 6.3% 7.50Lima Peru USD SM Month 6.50 18.2% 6.00NORTH AMERICACalgary, AB Canada CAD SF Year 8.50 0.0% 7.25Edmonton, AB Canada CAD SF Year 8.00 0.0% 7.50Halifax, NS Canada CAD SF Year 7.75 0.0% 6.75Montréal, QC Canada CAD SF Year 4.75 5.6% 4.25Ottawa, ON Canada CAD SF Year 8.25 6.5% 7.50Regina, SK Canada CAD SF Year 9.00 0.0% 9.00Saskatoon, SK Canada CAD SF Year 10.00 5.3% 9.00Toronto, ON Canada CAD SF Year 4.83 1.3%Vancouver, BC Canada CAD SF Year 7.60 0.7% 6.80Victoria, BC Canada CAD SF Year 12.00 0.0% 10.00Waterloo Region, ON Canada CAD SF Year 3.97 -0.7% 3.12Winnipeg, MB Canada CAD SF Year 6.00 0.0% 5.25Atlanta, GA US USD SF Year 3.17 -1.9% 2.83Bakersfield, CA US USD SF Year 4.00 0.0% 3.42Baltimore, MD US USD SF Year 4.72 -13.7% 4.73Birmingham, AL US USD SF Year 7.38 8.7% 4.07Boise, ID US USD SF Year 5.04 12.0% 4.80Boston, MA US USD SF Year 5.83 -2.0% 5.58Charleston, SC US USD SF Year 3.85 0.0% 4.30Charlotte, NC US USD SF Year 3.34 0.6% 3.54Chicago, IL US USD SF Year 3.71 -4.9% 2.67Cincinnati, OH US USD SF Year 3.53 11.4% 2.88
15 Global Industrial Report | Midyear 2013 | Colliers InternationalINDUSTRIAL SURVEY / LOCAL MEASURE / CURRENCY RENTSMARKET COUNTRY CURRENCYUNIT OFMEASUREMENTTIME PERIODPRIME WAREHOUSERENT (LOCALMEASURE / CURRENCY)6-MONTH CHANGEIN RENT (LOCALCURRENCY)PRIME BULKRENT (LOCALMEASURE /CURRENCY)Cleveland, OH US USD SF Year 3.30 1.2% 2.86Columbia, SC US USD SF Year 4.00 6.7% 4.00Columbus, OH US USD SF Year 2.62 -1.1% 2.51Dallas-Ft. Worth, TX US USD SF Year 3.15 3.3% 2.70Denver, CO US USD SF Year 4.62 2.4% 3.95Detroit, MI US USD SF Year 3.70 3.1% 3.59Fairfield, CA US USD SF Year 5.50 1.5% 5.52Fresno, CA US USD SF Year 3.00 25.0% 3.00Ft. Lauderdale-Broward, FL US USD SF Year 6.14 1.0% 5.84Grand Rapids, MI US USD SF Year 3.15 -1.6% 3.09Greenville/Spartanburg, SC US USD SF Year 2.75 -8.3% 2.95Hartford, CT US USD SF Year 3.98 -0.7% 3.50Honolulu, HI US USD SF Year 11.52 0.0%Houston, TX US USD SF Year 5.36 5.9% 4.36Indianapolis, IN US USD SF Year 3.67 -0.8% 3.24Jacksonville, Fl US USD SF Year 3.72 -1.6% 3.10Kansas City, MO-KS US USD SF Year 4.20 -1.6% 3.48Las Vegas, NV US USD SF Year 4.68 2.6% 4.16Little Rock, AR US USD SF Year 2.68 0.0% 2.74Long Island, NY US USD SF Year 9.07 6.0% 9.13Los Angeles - Inland Empire, CA US USD SF Year 4.20 2.9% 3.96Los Angeles, CA US USD SF Year 6.21 3.1% 5.94Louisville, KY US USD SF Year 3.40 0.9% 3.42Memphis, TN US USD SF Year 2.47 0.4% 2.50Miami, FL US USD SF Year 7.73 5.7% 7.16Milwaukee, WI US USD SF Year 4.68 10.1% 3.89Minneapolis/St. Paul, MN US USD SF Year 4.67 0.0% 6.19Nashville, TN US USD SF Year 2.95 0.7% 8.38New Jersey - Central US USD SF Year 4.37 -0.7% 3.49New Jersey - Northern US USD SF Year 6.28 2.6% 5.98Oakland, CA US USD SF Year 4.56 0.0% 4.44Omaha, NE US USD SF Year 4.62 6.7% 3.46Orange County, CA US USD SF Year 6.96 3.6% 6.12Orlando, FL US USD SF Year 4.40 0.2% 4.22
16 Global Industrial Report | Midyear 2013 | Colliers InternationalINDUSTRIAL SURVEY / LOCAL MEASURE / CURRENCY RENTSMARKET COUNTRY CURRENCYUNIT OFMEASUREMENTTIME PERIODPRIME WAREHOUSERENT (LOCALMEASURE / CURRENCY)6-MONTH CHANGEIN RENT (LOCALCURRENCY)PRIME BULKRENT (LOCALMEASURE /CURRENCY)Philadelphia, PA US USD SF Year 4.25 3.7% 4.14Phoenix, AZ US USD SF Year 5.16 3.0% 4.21Pittsburgh, PA US USD SF Year 4.47 1.1% 4.10Pleasanton/Walnut Creek, CA US USD SF Year 4.99 -1.0% 4.26Portland, OR US USD SF Year 5.48 5.8% 5.06Raleigh, NC US USD SF Year 3.63 -0.3% 4.28Reno, NV US USD SF Year 3.66 -6.4% 3.12Richmond, VA US USD SF Year 3.36 0.0%Sacramento, CA US USD SF Year 4.32 2.9% 3.84San Diego, CA US USD SF Year 8.16 1.5% 7.56San Francisco Peninsula, CA US USD SF Year 9.48 -6.0% 9.48San Jose - Silicon Valley US USD SF Year 6.24 6.3% 5.90Savannah, GA US USD SF Year 3.95 0.0% 3.75Seattle/Puget Sound, WA US USD SF Year 6.11 0.7% 5.88St. Louis, MO US USD SF Year 3.81 -1.0% 3.80Stockton/San Joaquin County, CA US USD SF Year 3.96 4.8%Tampa Bay, FL US USD SF Year 4.52 2.3% 3.86Washington DC US USD SF Year 6.73 0.1% 5.59West Palm Beach, FL US USD SF Year 6.81 1.6% 6.13
17 Global Industrial Report | Midyear 2013 | Colliers InternationalINDUSTRIAL SURVEY / U.S. DOLLAR RENTS / VACANCY RATES / INVESTMENT RATESMARKET COUNTRYEXCHANGE RATE (USD)DECEMBER 31, 2012DEC 2012 PRIMEWAREHOUSE RENTUSD/SF/YRDEC 2012 PRIME BULKRENT(USD/SF/YR)VACANCYRATE (%) DEC 2012DEC 2012YIELD / CAP RATEASIA PACIFICAdelaide Australia 0.96 4.99 -1.0% 4.26 8.25Brisbane Australia 0.96 5.48 5.8% 5.06 8.41Sydney Australia 0.96 3.63 -0.3% 4.28 8.00Beijing China 6.23 6.04 5.44 1.71 6.88Guangzhou China 6.23 5.72 5.44Hong Kong China 7.75 3.66 -6.4% 3.12 4.10Shanghai China 6.23 3.36 0.0%Delhi India 54.85 8.16 1.5% 7.56 8.00Jakarta Indonesia 9,799.95 9.48 -6.0% 9.48 9.00Tokyo Japan 86.58 6.24 6.3% 5.90 6.20Auckland New Zealand 1.21 3.95 0.0% 3.75 7.79Christchurch New Zealand 1.21 6.11 0.7% 5.88 7.90Wellington New Zealand 1.21 3.81 -1.0% 3.80 8.50Singapore Singapore 1.22 3.96 4.8% 4.50Seoul South Korea 1,065.31 10.52 10.52 4.00Bangkok Thailand 30.59 4.52 2.3% 3.86Chonburi Province Thailand 30.59 6.73 0.1% 5.59Ho Chi Minh City Vietnam 1.00 4.00 2.50 27.00EUROPE, MIDDLE EAST & AFRICAVienna Austria 0.76 7.35 7.20 8.50Minsk Belarus 0.76 13.23 15.50Antwerp Belgium 0.76 5.59 4.93 7.00Brussels Belgium 0.76 6.10 4.85 6.75Sofia Bulgaria 1.00 4.24 11.00Zagreb Croatia 0.76 7.35 10.00PragueCzechRepublic0.76 6.62 8.25Copenhagen Denmark 5.66 7.39 7.39 7.50Tallinn Estonia 0.76 7.06 9.00Helsinki Finland 0.76 14.70 11.03 7.50Bordeaux France 0.76 5.76 8.50Lille France 0.76 6.76 5.15 7.50Lyon France 0.76 6.12 7.40Marseille France 0.76 11.76 5.51 7.20
19 Global Industrial Report | Midyear 2013 | Colliers InternationalINDUSTRIAL SURVEY / U.S. DOLLAR RENTS / VACANCY RATES / INVESTMENT RATESMARKET COUNTRYEXCHANGE RATE (USD)DECEMBER 31, 2012DEC 2012 PRIMEWAREHOUSE RENTUSD/SF/YRDEC 2012 PRIME BULKRENT(USD/SF/YR)VACANCYRATE (%) DEC 2012DEC 2012YIELD / CAP RATEGlasgow UK 0.62 8.13 7.75Leeds UK 0.62 8.94 8.13 8.00London (Heathrow) UK 0.62 21.95 19.51 6.00Manchester UK 0.62 9.35 6.91 7.50Kyiv Ukraine 1.00 7.81 12.00LATIN AMERICABuenos Aires Argentina 1.00 8.81 8.36 6.00 10.50São Paulo Brazil 2.05 10.55 11.92 16.30 10.25Bogotá Colombia 1.00 9.70 6.58 9.80Mexico City Mexico 1.00 6.25 6.25 3.17 7.75Panama City Panama 1.00 9.48 8.36 11.00 9.50Lima Peru 1.00 7.25 6.69 11.00NORTH AMERICACalgary, AB Canada 0.99 8.53 7.27 5.05 7.00Edmonton, AB Canada 0.99 8.03 7.52 3.35 6.66Halifax, NS Canada 0.99 7.77 6.77 9.65 7.25Montréal, QC Canada 0.99 4.77 4.26 4.34 7.25Ottawa, ON Canada 0.99 8.28 7.52 5.76 7.50Regina, SK Canada 0.99 9.03 9.03 3.51 7.40Saskatoon, SK Canada 0.99 10.03 9.03 4.94 7.15Toronto, ON Canada 0.99 4.85 4.13 6.50Vancouver, BC Canada 0.99 7.62 6.82 3.67 5.70Victoria, BC Canada 0.99 12.04 10.03 4.15 7.00Waterloo Region, ON Canada 0.99 3.98 3.13 6.80 7.90Winnipeg, MB Canada 0.99 6.02 5.27 2.97 8.25Atlanta, GA US 1.00 3.17 2.83 12.41 7.90Bakersfield, CA US 1.00 4.00 3.42 2.80 10.00Baltimore, MD US 1.00 4.72 4.73 10.21 6.36Birmingham, AL US 1.00 7.38 4.07 9.39Boise, ID US 1.00 5.04 4.80 9.51 9.60Boston, MA US 1.00 5.83 5.58 17.38Charleston, SC US 1.00 3.85 4.30 10.36 7.50Charlotte, NC US 1.00 3.34 3.54 11.78Chicago, IL US 1.00 3.71 2.67 9.53 6.30Cincinnati, OH US 1.00 3.53 2.88 9.22
20 Global Industrial Report | Midyear 2013 | Colliers InternationalINDUSTRIAL SURVEY / U.S. DOLLAR RENTS / VACANCY RATES / INVESTMENT RATESMARKET COUNTRYEXCHANGE RATE (USD)DECEMBER 31, 2012DEC 2012 PRIMEWAREHOUSE RENTUSD/SF/YRDEC 2012 PRIME BULKRENT(USD/SF/YR)VACANCYRATE (%) DEC 2012DEC 2012YIELD / CAP RATECleveland, OH US 1.00 3.30 2.86 9.05Columbia, SC US 1.00 4.00 4.00 8.78Columbus, OH US 1.00 2.62 2.51 8.76 8.75Dallas-Ft. Worth, TX US 1.00 3.15 2.70 9.48 7.30Denver, CO US 1.00 4.62 3.95 7.45 8.20Detroit, MI US 1.00 3.70 3.59 11.45 9.90Fairfield, CA US 1.00 5.50 5.52 11.30 7.40Fresno, CA US 1.00 3.00 3.00 9.26 9.00Ft. Lauderdale-Broward, FL US 1.00 6.14 5.84 8.35 4.16Grand Rapids, MI US 1.00 3.15 3.09 7.29 9.88Greenville/Spartanburg, SC US 1.00 2.75 2.95 9.16Hartford, CT US 1.00 3.98 3.50 9.19 8.50Honolulu, HI US 1.00 11.52 3.75 8.00Houston, TX US 1.00 5.36 4.36 5.15 7.90Indianapolis, IN US 1.00 3.67 3.24 5.26 6.75Jacksonville, Fl US 1.00 3.72 3.10 10.08 9.00Kansas City, MO-KS US 1.00 4.20 3.48 6.72Las Vegas, NV US 1.00 4.68 4.16 15.53Little Rock, AR US 1.00 2.68 2.74 11.17 9.00Long Island, NY US 1.00 9.07 9.13 5.59 7.67Los Angeles - Inland Empire, CA US 1.00 4.20 3.96 6.45 7.00Los Angeles, CA US 1.00 6.21 5.94 4.21 7.00Louisville, KY US 1.00 3.40 3.42 8.96Memphis, TN US 1.00 2.47 2.50 12.46 7.75Miami, FL US 1.00 7.73 7.16 6.57 7.00Milwaukee, WI US 1.00 4.68 3.89 6.51 9.00Minneapolis/St. Paul, MN US 1.00 4.67 6.19 8.12Nashville, TN US 1.00 2.95 8.38 8.82 10.32New Jersey - Central US 1.00 4.37 3.49 9.17 6.30New Jersey - Northern US 1.00 6.28 5.98 8.35Oakland, CA US 1.00 4.56 4.44 8.23 6.50Omaha, NE US 1.00 4.62 3.46 5.09Orange County, CA US 1.00 6.96 6.12 4.90 6.25Orlando, FL US 1.00 4.40 4.22 10.21 7.50Philadelphia, PA US 1.00 4.25 4.14 9.75 7.84
21 Global Industrial Report | Midyear 2013 | Colliers InternationalINDUSTRIAL SURVEY / U.S. DOLLAR RENTS / VACANCY RATES / INVESTMENT RATESMARKET COUNTRYEXCHANGE RATE (USD)DECEMBER 31, 2012DEC 2012 PRIMEWAREHOUSE RENTUSD/SF/YRDEC 2012 PRIME BULKRENT(USD/SF/YR)VACANCYRATE (%) DEC 2012DEC 2012YIELD / CAP RATEPhoenix, AZ US 1.00 5.16 4.21 12.81 8.00Pittsburgh, PA US 1.00 4.47 4.10 8.21 7.75Pleasanton/Walnut Creek, CA US 1.00 4.99 4.26 10.22Portland, OR US 1.00 5.48 5.06 7.18Raleigh, NC US 1.00 3.63 4.28 10.23Reno, NV US 1.00 3.66 3.12 10.97Richmond, VA US 1.00 3.36 9.98Sacramento, CA US 1.00 4.32 3.84 12.92San Diego, CA US 1.00 8.16 7.56 9.87 8.50San Francisco Peninsula, CA US 1.00 9.48 9.48 9.85 7.00San Jose - Silicon Valley US 1.00 6.24 5.90 10.73 6.00Savannah, GA US 1.00 3.95 3.75 11.84 8.50Seattle/Puget Sound, WA US 1.00 6.11 5.88 5.82St. Louis, MO US 1.00 3.81 3.80 8.42Stockton/San Joaquin County, CA US 1.00 3.96 13.45Tampa Bay, FL US 1.00 4.52 3.86 9.36 8.75Washington DC US 1.00 6.73 5.59 10.71 6.52West Palm Beach, FL US 1.00 6.81 6.13 7.29 6.94