Europe: Most European economies are expected to slow relative to '07 as the global credit crunch forces many companies to limit growth in the face of a more uncertain businessenvironment. Because European warehouse markets are fairly well positioned to weather a slowdown, the region is anticipated to show modest growth, albeit below last year's levels. France and the UK are anticipating higher yields based on lower prices, but for therest of the region solid fundamentals are expected to see yields hold steady and in some cases possibly decline. Europe is home to some of the world's highest warehouse rents, with London's Heathrow submarket ranking number one internationally at $27.64 a sf per year. Not surprisingly it also registered the most expensive land in the region at $164.48 a sf.

North America: The US and Canada are also forecast to register more sluggish results than last year, though Canadian markets, particularly in the west, will continue to operate above trend. Markets connected to the energy sector or agriculture are expected to remain very strong, but those more dependent on consumer spending and manufacturing are anticipating more modest gains. As the US economy cools, leasing activity will likely show a corresponding decrease, but thanks to underlying fundamentals, only a few North American markets should show rent declines. North American warehouse rents remain modest by world standards, with the region's most expensive market, Honolulu, ranking only number eight in the world at $15.72 a sf. The next most expensive are Victoria, BC at 20th and the San Francisco Peninsula at 26th. Land prices are also modest by global standards, with only Silicon Valley exceeding $50 a sf. In fact, 16 US markets have land prices under $3 a sf. North America had three cities - Honolulu, San Francisco and Los Angeles - post sub 6% cap rates.

Asia Pacific: The Asia Pacific region is expected to remain the growth leader in '08, with China and India at the head. However, because many of the region's economies are highly dependent on exports to the US, close attention will be paid to how long the US slowdown lasts. Port cities remain very robust in response to strong intra-region trade. Warehouse rents vary significantly, with Japan, Hong Kong and Singapore all posting rates in excess of $15 a sf annually. Three Japanese markets ranked number two, three and four in the world, Hong Kong ranked seventh and Singapore came in 10th. Hong Kong had the highest land costs in the world at a staggering $1,001 a sf, followed by Tokyo's Ariake submarket at $363 a sf.