Rental growth for prime logistical properties expected to moderate in 2023
Occupiers are more cautious in expanding due to ongoing global conflict.
With the ongoing global political woes, property firm, CBRE, said occupiers are seen to be more cautious with their expansion activities, which could moderate rental growth for prime logistical facilities.
In its report on industrial property rents in the third quarter (Q3) of 2022, CBRE said few prime logistics projects will be finished by next year but most of the space was already reserved.
In Q3 2022, CBRE said prime logistics facilities, which are areas for logistics operations and with large-scale buildings, registered the highest growth across all industrial properties, with 2.6% increase.
Also, under the segment, average warehouse rents went up by 1.8% quarter-on-quarter (QoQ), followed by rents in factories, which grew 0.6% QoQ.
For this quarter, “leasing momentum remained healthy” especially for e-commerce leasing activity.
CBRE said the pharmaceuticals and aerospace segments are rolling out expansion plans.
There are also an increased enquiries for cold storage because logistics occupiers are looking to mitigate rising food prices by building stronger supply chains.
But the lack of suitable logistics facilities has limited the take-up, CBRE said.