Ti’s Warehouse Tracker: Warehouse costs begin to slow

Ti’s Warehousing Cost Index details that warehouse costs have been rising steadily since Q1 2022 and growing on a q-o-q basis across all three major regions. However, y-o-y cost growth continues to slow, particularly in Europe and North America.

The rebalancing of supply and demand, particularly in western economies, has been instrumental in supporting slower cost growth. However, it is important to note that vacancy is still tight in many markets, ensuring that costs and rents remain elevated in comparison with previous quarters.

Warehouse Cost Index – Major Regions

Markets in North-East Asia on the other hand have very high vacancy and have seen less dramatic cost increases over the past year in comparison with its Western counterparts.

Looking forward, we would expect minimal cost movement in Europe. Based on its current trajectory, we would expect costs in North America to continue climbing over the next year, although at a much slower pace than in previous years.

From mid-to-late 2024 and into 2025 however, we’d expect costs to push upward in both Europe and North America at a quicker pace once more, as reduced warehouse completions push down on vacancy rates and demand recovers.  

Despite an uptick in cost growth in Q1 2024, we would expect costs in North-East Asia to remain mostly flat or decrease depending on the market, as an abundance of supply leaves little room for cost and rent growth.

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