The 2018 industrial and logistics investment sector outperformed the rest of the commercial real estate market with £8.4 billion of assets changing hands, according to the Industrial & Logistics Market 2019 report by Lambert Smith Hampton.
In logistics, UK take-up in units above 100,000 sq ft was just short of 2016’s record high in units totalling 50,000 sq ft to 99,999 sq ft had the worst take up in nine years after a record year in 2017, said the report.
Take-up in East Midlands was 14.6 million sq ft, and big box logistics take-up increased by 93 per cent. And take-up in the West Midlands hit a six-year low due to a lack of large logistics deals.
LSH expects 11.7 million sq ft of speculative development to come forward in 2019, which will help to restore choice at the larger end of the market. But the current boom in speculative development is heavily weighted to the logistics sector.
The development response at the smaller end of the market has remained elusive it and there is a danger that the critical lack of supply of quality medium-sized and small properties will continue, despite robust levels of demand speculated LSH.
“The hive of activity across the industrial and logistics sector continues unabated. The driver remains the UK’s evolving ecommerce sector, with investors and occupiers alike clamouring for stock,” said LSH national head of industrial logistics James Polson. “Interestingly, however, there are clear areas to watch. The top of the tree overall performance is masking a weaker underbelly in certain areas. The challenge is clear, to satisfy demand across the entire market by providing the right properties at the right time.”