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Asian logistics businesses to face highest occupancy cost rises, says DTZ Research

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Hong Kong and Singapore will post the biggest challenge in terms of cost growth, exceeding 3 per cent per annum.

GLOBAL occupancy costs of businesses occupying prime logistics space are expected to go up at a modest average annual rate of 1.9 per cent till the end of 2018 - below the global inflation rate, said a DTZ report on Thursday.

DTZ Research's 2014 Global Occupancy Costs - Logistics report forecast that occupiers in the Asia-Pacific will, however, continue to face the highest occupancy cost increases.

Richard Yorke, the global head of occupier research at DTZ, said: "We forecast an average annual uplift of 2.4 per cent (in Asia-Pacific markets) to 2018. Hong Kong and Singapore will post the biggest challenge in terms of cost growth, exceeding 3 per cent per annum. Meanwhile, occupiers in Europe will benefit from the lowest cost increases. Landlords in the US are starting to get the upper-hand as demand for warehouse space grows. This will translate into cost increases which will surpass the US inflation level."

The Asia-Pacific remains the most affordable market globally. Six of the top 10 least-expensive markets globally are China and India.

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However, more-established Asia-Pacific hubs such as Hong Kong and Singapore have found places in the top 10 least-affordable list.

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