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Prologis Releases Third Annual Logistics Rent Index
Prologis Releases Third Annual Logistics Rent Index

Prologis Releases Third Annual Logistics Rent Index titled 2017: A Year of Accelerated Rent Growth

The Prologis Logistics Rent Index, introduced in 2015, examines trends in net effective market rental growth in key logistics real estate markets in the United States, Europe, Asia and Latin America.2 Our unique methodology focuses on taking rents, net of concessions, for modern assets. Prologis Research combines our local insights on market pricing with data from our global portfolio to produce the index.


Key findings from 2017 survey.

Rent growth is broad-based and accelerating. Globally, rents rose nearly 7% in 2017, an acceleration from 4% growth in 2016.

The U.S. is still the fastest-growing region. Rents rose 9% in 2017, an acceleration from 6% in 2016. In general, growth was steady for larger bulk product from 2016 (mid-single digits), but accelerated in large coastal markets and in infill submarkets where growth was more than 10% in 2017.

Europe has experienced an acceleration and a rotation in growth leadership. Rents rose nearly 3% on a net effective basis, and faster on the continent than in the UK in 2017.

Low vacancy is prompting competition among customers. A main hallmark of this cycle is disciplined supply, healthy demand and historically low vacancy rates.

Considerable dispersion exists across growth rates and their drivers. Local, on-the-ground knowledge is critical. Growth rates vary widely. In some markets, rental rate expansions are mature and remain robust—in others, growth is just beginning (only a handful are flat or negative).

Barriers to supply are a key differentiator. Rent growth was outsized in markets with limited new supply. Notable, high rental rates are not diminishing demand. Rents may seem higher than in prior cycles, but they remain below those levels on an inflation-adjusted basis. Moreover, some of the strongest rent growth has been recorded in the most expensive markets, such as the coastal U.S. and Germany.


Download Report: http://https://prologis.getbynder.com/m/624ebb203f1f372b/original/Prologis_Logistics_Rent_Index_March_2017.pdf
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