International Property Consultations, King Sturge, has published a report into Global Trends in Industrial Parks. The report states that the onward march of globalisation will not be reversed, despite the worldwide caution emanating from terrorism.
Angus McIntosh, Partner and Head of Research at King Sturge said, 'Over the years, much has been written about globalisation but there is very little hard evidence demonstrating the impact of this phenomenon. This report in a survey of 24 industrial park across the world demonstrates on a case by case basis how the global economy is changing.'
World merchandise exports increased by some 7% per annum over the last decade and logistics and supply-chain management are having major impacts on industrial properties.
All economies across the world are becoming more service orientated; employment in services increased from 67% to 73% since the 1980s in the USA. Even in Central Europe, service employment has increased from 37% to 54% over the last 20 years. The demand for major warehousing and distribution facilities dominates industrial parks in Europe and North America, reflecting the increasing demands of the serviced based economies.
Lower property costs in Asia-Pacific continue to reinforce the role of this region as the principal cost efficient manufacturing zone of the global economy. Total occupation costs in Shanghai are seven times lower than their equivalent in West London.
The report on Global Industrial Trends reveals that, in US$, inflation adjusted terms, industrial rents are more than 40% lower than in 1995 in all Asia-Pacific industrial markets.
In US$ adjusted for inflation terms, rents have fallen across Asia-Pacific since 1995. Percentage changes from the King Sturge survey showing percentage change between 1995 and 2002 are as follows:
Hong Kong -40.42
Kuala Lumpur -53.56
(Source: King Sturge)
With China joining the World Trade Organisation in 2002, Asia-Pacific will dominate the manufacturing base of the world. In Europe major logistics service providers will be at the forefront in terms of requiring more cost-efficient flexible lease terms and tenure arrangements which reflect fast changing trends in the global industrial and distribution property markets.
(source: King Sturge)