Growth of industrial rents to moderate by 1%-3% in 2023: Colliers

In 2022, the market recorded an annual growth of 6.9%.

The industrial market will see a slowdown in rents in 2023 following a record-breaking growth in 2022, Colliers said.

In a report, Colliers said the market’s rental growth will likely moderate by 1% to 3% this year.

In 2022, the market recorded a 6.9% annual growth, marking it the fastest YoY rental growth since Q3 2013.

In terms of prices, Colliers expect an increase of 3% to 5% “on the back of sustained interest in this asset class due to higher yields and limited availability.”

Meanwhile, Colliers said the market will likely experience “an ample supply situation in the next three years with an average of 1 million sq m of new supply expected to enter the market annually from 2023 to 2026.”

“Supply is likely to outstrip demand and weigh on rental growth in the next two years. An exception would be the warehouse segment as there appears to be a dearth of supply post-2024, and where pre-commitment to existing pipeline supply is high,” Colliers reported.