CBRE has released its monthly Industrial & Logistics Snapshot. This edition provides direct comparison for take-up for H1 2017 against H1 2016 on a regional, quality and sectoral basis. Highlights include:
- Take-up in Q2 2017 fell to 2.74M sq ft, down 56% on Q1. H1 2017 was down 29.73% as compared to the same period last year.
- Ecommerce has been prominent accounting for 35% of all take-up activity over the past 12 months. The automotive industry is making significant gains and comprises 9%.
- Grade A take-up dominated East Midlands activity with take-up in the North West, South East and West Midlands also including significant second hand lettings.
- Availability fell during Q2. There is currently only 5 months of Grade A supply (8,175,000 sq ft) across the UK. A key theme for the sector is the current demand/supply imbalance.
- Speculative development activity across the UK fell during Q2. There are currently 21 schemes under construction with practical completion in 2017.
- There is currently no speculative development of units in excess of 100,000 sq ft in Scotland.
Mike Baugh, Senior Director, CBRE Industrial and Logistics, Leeds commented:
“The industrial market in the region continues to perform well and take up is on track to match 2016 performance. The supply of Grade A space continues to diminish with limited speculative activity currently taking place, which is having a positive impact on rental values. Generally even given the economic and political uncertainty experienced in 2017 the market has maintained stability”
Jonathan Compton, CBRE Industrial and Logistics Advisory said:
“Although the market has been slightly more subdued in the first half of the year, there remains a healthy appetite from investors looking to deploy capital into the sector. At present, there is a significant demand/supply imbalance, with only 5 months of Grade A supply remaining across the UK which has put constraints on the market. However, key drivers in the occupational market, especially the growth of online retail, are expected to witness further growth and will continue to drive activity across the logistics market.”
