A report from DTZ shows the continuing value of industrial assets around Heathrow.
The report, the DTZ European Occupancy Costs Survey – Logistics 2010, reveals that in general UK occupiers will benefit from subdued growth in current occupancy costs until at least 2012, combined with relatively low labour costs when compared to other high-cost European markets.
In a forecast (2010-2014) for logistics occupancy costs, it also reveals that London Heathrow has one of the highest occupancy costs in Europe at €215 per sq m per annum costs, reflecting the continuing premium value of assets close to the airport. South East England sits at €126 per sq m per annum, while the European average at the end of September 2010 was €86.3 per sq m per annum.
Tunde Adegbemile, Head of DTZ London & South East Industrial and Logistics, comments: “Our research highlights the significance of Heathrow – the busiest international airport, and the South East offering unparalleled access to markets worldwide, which is reflected in the higher occupancy costs”.
“In addition, our report also highlights the good value offered by the UK in respect of lower labour costs when compared to other high-cost European markets. The UK also benefits from greater flexibility of labour compared to other European hubs. This is a further consideration for logistics occupiers seeking to obtain maximum value from European locations.”
During the past 12 months, occupier activity in the logistics sector has improved with some demand returning, particularly for modern flexible distribution space, say DTZ. The economic outlook for logistics is relatively positive, with growth in transport and communications expected to outperform GDP over the report forecast period (2010-2014).