This report provides a detailed overview of national and regional industrial & logistics sector activity as well as an economic and sector outlook.
A selection of key findings:
- In an extremely low supply environment, 2021’s take-up for warehouses (100,000 sq ft+) reached a record-breaking 50.7 million sq ft, 3.4% ahead of 2020. Most regions witnessed record levels of activity.
- Average land value growth in the UK skyrocketed, reporting a record 71.5% annual increase (from £2 million per acre to £3.4 million per acre) in January 2022 as investors compete for sites and speculative space is let at a rapid pace.
- Prime warehouse rents will grow by 12.5% this year and 8.5% in 2023, while the sector is expected to witness further mild yield compression over the first half of the year.
- Occupier and landlord collaboration will need to intensify as parties are facing numerous challenges (e.g. more stringent ESG regulations, supply chains issues, steep inflationary costs, staff wellbeing and retention, etc).
- The inflation surge that the UK is experiencing is not unexpected. Forecasting houses expect a peak in Q1 or Q2 of between 6% to 8%. It could go higher and last longer given unfathomable geopolitical factors.