Global real estate services firm Jones Lang LaSalle has unveiled the first Airport Real Estate Index within its Port, Airport and Global Infrastructure (PAGI) report.


 

The Airport Real Estate Index, which builds on work first featured in Global Airport Cities magazine, measures America's top 12 airports against criteria such as cargo volumes, infrastructure plans and real estate conditions.

According to Jones Lang LaSalle's third annual PAGI report, a surge in global trade and higher cargo volumes has spurred demand for warehousing space around US airports.

It added that the positive economic conditions coupled with infrastructure improvements in the US have made for a major pickup in airport real estate.

The report found that cargo volumes through America's airports increased 11% in 2010 to 28.2 million metric tonnes - just short of the 2007 peak of 30.4 million tonnes.

Meanwhile, although Memphis Airport is listed as the world's second largest airport for cargo volumes in 2010, behind Hong Kong, it is ranked sixth on the Jones Lang LaSalle's Airport Index.

Topping the Index is Los Angeles' LAX, which has strong cargo volumes, a low 3.8% industrial real estate vacancy rate, and several multi-million-dollar investment plans in the pipeline.

New York's JFK Airport came in second place. At the same time that the high demand for warehouse space in the metropolitan area has driven down vacancy rates to a low 3.4%, JFK is also one of the most space-constrained airports with the highest rents at $12.31 per square foot in its delineated trade area.

Elsewhere, although Chicago O'Hare Airport has a relatively high vacancy rate of 14.2%, it ranks third on the Index because it serves as a hub for major airlines such as United Airlines and American Airlines, and has a vigorous modernization programme in place, Jones Lang LaSalle said.

John Carver, head of the PAGI group at Jones Lang LaSalle, said: "The Index is an indicator of how well the real estate markets around top US airports are performing."

"Markets such as LAX and New York JFK have held strong with low vacancy rates owing to high demand and a lack of new construction.

"Whereas airport submarkets that saw a rise in new development before the recession, such as Dallas-Fort Worth and Miami, suffered higher vacancy rates during the recession and are taking longer to recover."

The top 12 airports on the Airport Real Estate Index ranked as follows:

1. Los Angeles (LAX)
2. New York JFK (JFK)
3. Chicago O'Hare (ORD)
4. Miami International (MIA)
5. Anchorage (ANC)
6. Memphis (MEM)
7. Newark-Liberty
8. Atlanta (ATL)
9. Dallas Forth-Worth (DFW)
10. Louisville (SDF)
11. Indianapolis (IND
12. Oakland (OAK).

"For airports to rank higher on our Index they must seek to raise their cargo levels and through traffic as well improve infrastructure to improve the vitality of their real estate markets," added Carver.