Global prime warehouse occupancy costs up 3.6% - Savills

Global prime warehouse occupancy costs increased by 3.6% year-on-year to March 2025, according to Savills.

Savills prime warehouse statistics

However, this represents a significant slowdown from the 7.3% increase in the previous year, as geopolitical uncertainty has led some occupiers to delay leasing decisions, impacting rent growth in some areas.
London remains the most expensive location, as a result of several factors: sustained strong demand from logistics businesses for scarce prime warehousing, the city's well-developed infrastructure, and its proximity to a significant and wealthy consumer population, all of which contribute to rising rents.
Rising operating expenses are contributing a larger share of cost increases in many markets due to the need for tech-enabled facilities and automation.
Key factors for site selection remain consistent across regions: proximity to transport, labour, and power, though a multitude of other factors are increasingly considered.
Sarah Brooks, associate director in Savills World Research team, commented: "Slowing cost increases reflect an industrial occupier market in transition: post-pandemic momentum has largely given way to more cautious occupier behaviour in the face of geopolitical and macroeconomic uncertainty. Increased warehouse supply in some markets also tempered rent increases. Regionally, however, costs have still grown year-on-year: Europe saw the largest increase in prime warehousing costs at 5.3% in the 12 months to March 2025."
Rick Schuham, CEO of Global Occupier Services at Savills, explained: "For those signing leases now, risk management and flexibility are paramount. Across all regions, occupiers are pursuing lease structures that offer greater agility, including shorter-term commitments. Managing the risks associated with everything from climate change to wide-ranging, regularly changing, and unpredictable tariff declarations is also impacting logistics requirements and supply chains. Traditional drivers like transport access and access to affordable labour remain essential, but are weighed alongside power availability, automation, and smart systems. Cost management continues to be a priority, but globally, tenants want to optimize available space and improve efficiency."