However, the international real estate advisor reports that this is a notable decrease from the 7.3% growth observed in the previous 12 months as warehouse headline rents have stabilised or declined in some markets as some occupiers have delayed leasing decisions in the context of geopolitical uncertainty. Rising occupier operating expenses have made up the bulk of cost increases in many markets, according to Savills, with a shift towards the need for smart, tech-enabled facilities and greater automation.

London retains its position at the top of Savills global warehousing costs index for the fifth consecutive year, recording total annual occupancy costs of nearly $49 per sq ft. According to Savills, this has been driven by ongoing high demand from logistics occupiers for the very limited prime warehouse space available, and the city’s strong infrastructure and proximity to a dense and affluent consumer base, which continue to boost rents. Sydney, staying in second place, at $31.60 per sq ft, has been bolstered by resilient e-commerce demand and low vacancy rates, while Dubai, which has moved into third place from fifth, has seen one of the sharpest rises to $26.43 per sq ft, 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 moved downwards as rising vacancy rates, supply pipeline, slowing demand from retailers and moderating post-pandemic e-commerce activity have eased rental pressures across key US logistics hubs. Hong Kong’s costs have similarly fallen, reflecting weaker occupier sentiment amid continued economic uncertainty and trade tensions.

In terms of occupier demands. Savills says that the top three site selection criteria remain consistent across APAC, EMEA and the Americas – proximity to key transport hubs; labour availability and cost; power availability and cost – however there are a multitude of other factors that are now also considered in the decision-making process.

Sarah Brooks, Associate Director in Savills World Research team, comments: “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, while in Asia Pacific and North America, this figure stood at 1.8% and 1.3% respectively over the same period.”

Rick Schuham, CEO of Global Occupier Services at Savills, explains: “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 optimise available space and improve efficiency.”