Global commercial real estate services firm Avison Young has released new analysis revealing that the UK industrial and logistics sector saw increased uptake in Q1, with big-box investment activity increasing by 9% year-on-year.
The Q1 investment total reached £393 million which is still below the five-year Q1 average, however, Avison Young states that this is being driven by a lack of investment stock available within the market.
The Southeast saw the highest level of activity, totalling £130m whilst volumes in the Northwest totalled £75m.
Key transactions included Valor Real Estate Partner, QuadReal’s acquisition of Tesco Distribution Centre in Thurrock for £130m and Tritax Big Box’s purchase of the Sainsbury’s Distribution Centre in St Helens for £75m.
Leasing activity for big-box distribution units over 100,000ft² was slightly lower in Q1 with a total of 4.6 million ft² of Grade A space leased – 10% lower than the three-year Q1 average.
Approximately 63% of activity took place in the East Midlands through major deals including Amazon’s 956,000ft² facility in Kettering and DHL’s 497,000ft² lease in Corby.
Yorkshire growth was also strong, with Grade A big-box take-up reaching 1.2 million ft² in Q1 alone – exceeding the total for the whole of 2024 (712,000ft²).
Compared to Q4 2024, Grade A big box space under construction grew by 8%, reaching 55.7 million ft² while speculative development rose by 14%.
Principal and managing director, industrial and logistics at Avison Young David Willmer said: “Our outlook for the big box market for the remainder of the year is positive.
“Despite the decline in take-up levels, compared to Q1 last year, over 4 million ft² of space is already under offer in April this year.
“Enquiry levels for big-box space remain encouraging and we believe that activity will be close to that of 2024, which is similar to pre-pandemic levels.
“It is also encouraging to see a rise in investment volumes, compared to Q1 last year, highlighting the sectors’ resilience and investors’ appetite for industrial stock across the UK.”
