What are people in the Industrial & Logistics (I&L) sector talking about recently?
The supercharged take up for industrial space in 2020 and how the Industrial & Logistics sector has moved from bridesmaid to bride in terms of asset class desirability remains a key talking point for people in the commercial property sector.
The events of the past year have resulted in consumers of all ages embracing technology and the greater reliance on faster and quicker delivery service has caused an acceleration of online retail which continues to push demand for industrial space to higher levels.
The supply chain has had to adapt quickly to meet this demand. There has been a squeeze on demand for prime buildings and we have seen the rise of the mega box (over 300,000 sq ft) which shows no real signs of abating.
The weight of money coming into the sector is also keeping people talking. We’re seeing both traditional institutional sources and foreign equity in a range of joint venture vehicles looking for platforms to invest into the UK I&L sector. Meanwhile, investment yields for prime assets are at a record low, with a huge appetite from purchasers to secure well-let income.
Following a record year for the industrial sector in 2020 - where do you see further growth in the I&L industry?
Growth in the online sector will continue without a shadow of doubt, but as the market matures we are going to see new entrants to the UK market, along with a growth in the number of start-ups.
The electric vehicle market is already having a big impact on take-up with companies such as ARRIVAL taking several big buildings around the Bicester area for the development / manufacturing of their commercial fleet.
Talk of GIGA-factory sites being located in both the Midlands and South West will create a clustering of new SME businesses along with a repurposing of traditional manufacturing plants.
If you had a superpower in the realm of real estate. What would it be?
Super planning powers - the ability to instantly zone land for development, reducing the time lag on development.
About the Author
Simon Norton is a director in the Birmingham office within the Industrial & Logistics team. He has 25+ years experience dealing with numerous site and building disposals / acquisitions throughout the wider Midlands area.