Heathrow expensive, but costs to grow slowly – DTZ
New research from DTZ shows that Heathrow is one of the most expensive locations in Europe for logistics occupiers. The firm’s European Occupancy Costs Survey – Logistics 2010 says Heathrow logistics occupancy costs at €215 per sq m per year compare with a European average of €86.3 per sq m per annum as of the end of September 2010. After Heathrow, south east England is the next most costly location, with occupancy costs of €126 per sq m per year.
Despite the higher costs in some UK regions compared with other parts of Europe, DTZ feels that UK logistics occupiers will benefit from subdued growth in current occupancy costs until at least 2012, combined with relatively low labour costs compared with other high-cost European markets. The higher costs in the UK are the result of high rents and high real estate taxes compared with logistics centres in France, Belgium and Central Eastern Europe.
DTZ’s head of Industrial and Logistics, Simon Lloyd, says the UK also benefits from greater flexibility of labour than other European logistics hubs. “This is a further consideration for logistics occupiers seeking to obtain maximum value from European locations.”
DTZ says occupier activity in the logistics sector has improved during the past year, with some demand returning, particularly for modern, flexible distribution space. The firm expects occupiers to be able to find good-value opportunities in the UK as the rise in occupancy costs will be gradual, reflecting the relative ease of supplying new space to absorb new demand.