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UK logistics real estate market outperforms

The UK logistics property market continues to outperform, according to new research from real estate services firm Cushman & Wakefield.

The company’s research showed that in Q3 total take-up reached 6.5 million sq ft, up 43% on the same period in 2017. The report revealed that an increase in speculative development combined with pent-up demand for high-quality space has led to the highest amount of speculative space absorbed over a single quarter since 2012 (1.8 million sq ft).

The study showed that it was demand from both traditional retailers and ecommerce retailers which led the desire for space, with the sector accounting for 44% of take-up volume. One of the largest such deals was Amazon’s commitment to a 360,000 sq ft purpose-built warehouse at M6 Major Haydock in Merseyside.

The availability of new stock is driving prime rents, with the North West registering the strongest prime rental growth over the year (6.2%), followed by London (5.9%) and Yorkshire (5.5%).

In the Investment market, logistics property continued to outperform other commercial sectors, posting total annualised returns of 17.7% and 22.1% for distribution warehouse and standard industrial respectively in Q2.

Bruno Berretta, UK Logistics & Industrial Research & Insight, Cushman & Wakefield, said: “Whilst the manufacturing sector has been noticeably less active this year, largely due to Brexit uncertainty, the positive structural impact of e-commerce means there are reasons to be optimistic about the sector even in these uncertain times.”

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