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Edinburgh Recorded Highest Prime Logistics Rent Rise in Europe in H1 2015

Prime industrial rents in Edinburgh grew by +11.1 per cent in H1 2015, the largest increase in Europe, according to the latest Industrial and Logistics Snapshot from global property advisers, Colliers International.

The Western Europe markets of Glasgow and Manchester (both +10 per cent), Bristol (+8.3 per cent) and Rotterdam (+7.9 per cent) also performed positively. Conversely, Minsk in Belarus reported the biggest decline in prime rents in Europe in the first half of the year dropping -15.5 per cent in H1 2015; this was closely followed by Kiev in the Ukraine with a decline of  -14.9 per cent and St Petersburg in Russia with a decline of -8.3 per cent.

The availability of good quality space remains very low in all major logistics markets in Germany and the development pipeline is still constrained. Despite this, prime rents remained stable in H1 2015, with exception of Munich where slight growth was recorded (+2.3 per cent) and a further upward trend is expected.

The logistics market in Holland is also seeing lack of modern supply in key locations. In this situation, many occupiers choose to build their own premises. However, thanks to an improved economic outlook and higher availability of financing, an increasing number of developers have decided to build speculatively. The other notable trend is the increasing demand for smaller premises around large cities, in particular from the e-commerce sector.

In Sweden, prime rental increase were recorded in Gothenburg (+4.3 per cent) and Malmoe (+3.8 per cent). After strong growth in 2014, prime rents in Stockholm flattened in the first months of 2015.

In Southern Europe, the logistics rents in Madrid’s prime areas started a slight recovery trend (+4.2 per cent). The supply of high quality logistics units is very scarce, leaving many occupiers’ requirements impossible to meet.

Prime rents across major Central and Eastern European markets remained largely stable. Some growth was recorded in Budapest (+6.5 per cent) on the back of improving demand and falling vacancy levels.

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