A shortage of warehouse space in major cities such as Beijing and Shanghai will lead to a continuation of higher rental rates in the coming year, according to an executive from CB Richard Ellis quoted by China Economic Review.

Andrew Hatherley, executive director of Asia industrial and logistics services for the property firm, said export levels are improving but logistics companies stopped building new warehouse space two years ago. The resultant shortage of space will lead to a 20 per cent increase in rental rates over the next 12 months, he predicted.

Logistics firms are likely to respond by building more warehouses, but more space is unlikely to become available for at least another year.