Overall prime warehousing occupier costs rose strongly in 2020–2022 due to pandemic-driven e-commerce growth, but the pace has slowed amid economic pressures and geopolitical tensions.

Global prime warehousing costs (prime rents plus taxes and service charges) increased by 1.1% in the six months to March 2025, marking three years of decelerating growth.

Regionally, Europe has seen the largest increase in prime warehousing costs at 5.3% in the 12 months to March 2025, while in Asia Pacific and North America, this figure is 1.8% and 1.3%, respectively, over the same period. In Q1 2025, North American prime warehousing rents fell by -0.1%, driven by a combination of overbuilding and the continued normalisation of demand following the pandemic.

Global top ten warehousing markets: London holds first position

London has kept its position as the world’s most expensive warehousing market for the fifth consecutive year, with total annual occupancy cost reaching nearly $49 per square foot. This underscores the UK capital’s ongoing appeal, despite cost pressures. High demand for limited prime space, strong infrastructure and proximity to a dense and affluent consumer base continue to drive high rents.

Sydney holds firm in second place, at $31.60 per square foot, having climbed steadily up the rankings since 2021. Resilient e-commerce demand and low vacancy rates bolster the industrial market in Australia. Dubai has had one of the sharpest rises to $26.43 per square foot, moving from seventh place in 2023 to third in 2025, reflecting the city’s growing role as a global logistics hub connecting Asia, Africa and Europe.

In contrast, markets like Los Angeles and Northern New Jersey have fallen in the rankings as rising vacancy rates and supply pipeline have eased rental pressures across key US logistics hubs. Slowing demand from retailers and moderating post-pandemic e-commerce activity have also contributed to this adjustment. Hong Kong’s fall results from weaker occupier sentiment amid continued economic uncertainty and trade tensions. While headline rents may be flat or declining in some markets, operating expenses continue to trend upwards globally.

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