London’s Heathrow Airport is the world’s most expensive industrial location according to Business Space Across the World, the annual report by international property consultant Healey & Baker and its global partner Cushman & Wakefield.
Heathrow’s total occupancy cost (rent, plus property taxes and service charge) stands at €274 per sq m, while second-placed San Francisco’s is €265 per sq m. Heathrow rental values increased by 17% over the year but San Francisco’s saw a dramatic fall of 57%.
The main movers in the league table were Tel Aviv and Paris, which moved from 9th to 4th place and 20th to 8th, respectively. The key reason for their rise was the stability of rents in these locations compared with falls in rents in many of the top 10 most expensive centres.
David Hutchings, Head of the European Research Group at Healey & Baker said:
'Although many markets remained relatively healthy in 2001, they were unable to reach the heights of the previous year. Overall, this meant a -4.9% decline in rental levels across the locations surveyed as the distribution and warehousing market settled back.
'The telecoms industry that had dominated the sector in 2000 saw a sharp global decline and this along with the global economic slowdown and the decline in manufacturing was instrumental in the industrial sector’s downturn.
'By contrast, the logistics sector has remained buoyant, fuelled by increases in rationalisation and outsourcing. While this has created more interest in bigger units with good transport links this has also in part caused a growing amount of smaller and older space to languish on the market.'
Other main findings for the world’s top industrial locations:
Europe
* While rental levels on aggregate in Europe declined last year (-3.8%), the falls were less severe than the global average.
* Zurich lies behind London Heathrow as Europe’s second most expensive industrial location and the world’s third.
* Central and Eastern Europe performed marginally better than Western Europe with strong growth in Russia and a stable situation in the Czech Republic and Hungarian industrial markets.
* While there were still areas of growth in France, Austria, Belgium, Italy and the UK, they were counter-balanced by steep falls in Turkey, Ireland and most of Scandinavia.
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(source: Healey & Baker)
