The Prologis Logistics Rent Index

Since 2015, Prologis has published the global Logistics Rent Index, which examines trends in net effective market rental growth in key logistics real estate markets in the United States, Europe, Asia and Latin America. Some of last year‘s key results showed:

  • Global market rental rates rose by nearly 7 percent, accelerating from the 4 percent rental growth realized in 2016.
  • The U.S. led all regions with 9 percent growth.
  • Growth accelerated in Europe, led by the continent.

In Germany, the average net effective market rental growth was 3.6 percent in 2017. This result is based on 12 national logistics hot spots—among them Rhine-Ruhr (Cologne) with a rental rates growth of 4.5 percent and Munich with an increase of 3.9 percent. “The reasons for increasing rental rates are diverse,” said Thomas Karmann, managing director, regional head Northern Europe, Prologis. “Development costs for logistics facilities are rising, as well as the prices for land. Market vacancies have fallen to their lowest point on record.”

Customer sentiment is positive; their businesses are growing. The demand for logistics space is high. Nevertheless, rents remain low on an inflation-adjusted basis. In addition, rents represent only a small share of total and supply chain costs. The combination of low vacancies, improving economic growth and rising replacement costs suggests that rents will continue to rise in 2018.

Find out more about the Prologis Logistics Rent Index.

Related Features