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Logistics ‘race for space’ causes UK Land Values to double in three years

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The great logistics boom is showing no signs of slowing as ecommerce and appetite for speedy last mile logistics continues to drive demand for logistics space, pushing up land and rental values across the UK to record levels.

That’s according to Colliers’ Industrial & Logistics experts who this week released their interactive UK Rents Map which tracks prime and secondary rents and land values across more than 100 UK locations. 

Colliers’ Rents Map shows a dramatic acceleration of average land values across England, posting a 40% increase y/y in July 2021, as investors compete for sites. While this is underpinned by strong rental growth, investor appraisals are also supported by a continuation of future expected demand, coupled with further rental growth and moderate yield compression over the coming quarters.

“We’re not seeing a situation of this magnitude anywhere else in Europe,” said Andrea Ferranti, head of Industrial & Logistics Research at Colliers. “Sustained demand for logistics space to meet the appetite for online retailing and last mile logistics has caused land values to go through the roof. However, this increase in land values will have a knock on effect far beyond the logistics market and will impact a range of sectors from general industrial through to residential and in some instances leisure and hospitality outside of city centres.”

Meanwhile, average prime rental growth for logistics units larger than 100,000 sq ft in England posted a positive 13.5% y/y in July as the provision of new schemes, accompanied by a low supply environment, is prompting a step change in rental values. Similarly, smaller units of more than 10,000 sq ft, recorded a 14.5% rental growth. 

Len Rosso, Head of Industrial & Logistics, Colliers added: “We expect rental growth for prime and secondary units to continue due to a combination of factors such as; strong tenant demand, dwindling supply, a rise of CPI and the shortage of construction materials which, in some cases, is challenging the delivery of design and build and speculative schemes.”

Click here to view our interactive UK Rents Map

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Andrea Ferranti

Director for Industrial Client Engagement

Research and Forecasting

London - West End

Head of Industrial & Logistics Research working closely with the Research & Forecasting team whilst supporting the Industrial and Logistics teams nationally in providing research and advises to clients. Andrea leads on the division’s key research papers which include, but not limited to, the Industrial & Logistics Barometer and the UK Speculative Development Map – both of which have become key benchmark publications highly valued by UK investors and developers alike.

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Len Rosso

Head of Industrial and Logistics

Industrial and Logistics

London - West End

Len has more than 30 years' experience in the commercial property sector. Having started out as a trainee surveyor in 1983 he moved on to set up Jansons in 1990, a niche agency specialising in industrial in North and West London. In 2004/5 the business was voted Industrial Agency of the Year, this being the first ever non West End national practice to have won this prestigious award. In that same year the business transacted in excess of 3.5 million sq ft which accounted for in excess of 50% of the total transactions for the North and West London market.


Since joining Colliers International, as the Head of the UK Logistics and Industrial Department, the objectives are the same as always, to outperform all competitors whilst providing the highest level of service to all our clients. In 2018, the Colliers International UK Industrial & Logistics team completed over 250 deals totalling over 15 million sq ft. 

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Suzy Simpson

Head of Content, Communications and PR

PR

London - West End

As Head of Content, Communications & PR for Colliers in the UK, I am responsible for driving the strategic direction of corporate communications, media relations, and the programming and production of multi-channel content to engage external and internal audiences across the UK.

Get in touch for help with: 

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  • Media Relations
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