Skip to content

East Europe and Brazil strongest for industrial commercial property

Rio de Janeiro recorded the highest rise in rents while the industrial markets in Poland and Ukraine also performed well, mostly due to a lack of quality accommodation.

This section of the property industry deteriorated across the global in all but a handful of markets, the report – Industrial Space Across the World – from global real estate adviser Cushman & Wakefield shows.

Overall rental growth slowed to 2.4% down from 6.1% in 2007 and the more mature markets of North America and Western Europe were the first to underperform early in 2008.

But the CEE defied the trend with a stable annual rental growth of 6.7%, almost the same level as 2007. The Polish and Ukrainian markets were both very active over the year with considerable demand for a relative shortage of quality accommodation, the report says. Rents increased in Poland by 28% in 2008 and in Kiev, Ukraine, by 25%.

In South America industrial rents rose by 12.4% with Rio de Janeiro recording the highest global rise in rents of 46%. The strong performance of South American markets offset the -0.4% decline in rental growth in the US and Canada.

Heathrow in London was the world's most expensive industrial location for the eighth year in a row followed by Tokyo and Dublin.

'The CEE region has been outperforming its European neighbours for the last decade, in terms of both growth in construction and take up of industrial space. The shift of production and distribution from the West to the East has been the main driver over recent years,' said Ferdinand Hlobil, Head of Industrial, Cushman & Wakefield CEE.

'This is expected to continue, primarily due to the fact that about 40% of the European population is located in Central and Eastern Europe. The large potential consumer market in CEE is still very much under-developed, and even when taking into account the present global crisis, we expect the growth of the industrial market to continue in the medium term,' he added.

Brazil's strong domestic economy helped it perform well, according to Mário Sérgio Gurgueira of Cushman & Wakefield, Brazil. 'Brazil performed well in the industrial and warehouses market because of an improving domestic economy over the year. This has seen consumer demand rise and has consequently resulted in more sales, more warehousing and more transportation,' he said.

'The outlook for the market indicates lower demand but there is still evidence of schemes going ahead at the moment, because demand for high quality buildings is still evident,' he added.