According to the latest ‘Industrial & Logistics Rents Map’ from Colliers, rent prices for large distribution warehouses have continued to rise in 2024, at an average rate of 5% year-on-year.
Colliers data shows that across the whole of the UK, rents for units larger than 100,000ft² are, on average, £11.50 per ft². Meanwhile, prime headline rents for mid-box and multi-let units have reached an average of £14.80 per ft², up 4.4% year-on-year.
Colliers notes that the Midlands and North West lead the way in terms of upwards rental growth, while ‘rents in the capital remained stable’.
The data – compiled by Andrea Ferranti, head of industrial and logistics research at Colliers – also shows that the vacancy rate for units in excess of 100,000 ft² across the UK industrial market dropped from 7.5% in Q1 2024 to 7.3% by the end of Q2.
Ferranti commented: “Supply has increased notably with some pockets of the market arguably providing occupiers with greater choice. However, rental growth on average has remained elevated due to a resilient occupational market characterised by robust appetite for good quality and efficient space.
“We’ve seen many occupiers consolidating their supply chains during the last 18 months, and the Midlands has naturally been the location of choice for much of this activity.
“Meanwhile incentives have returned to the pre-Covid normal of approximately one month rent-free per year of lease term, depending on length, unit specifications, location and covenant strength.”
According to Colliers, industrial land values have remained stable in 2024, with a UK average of £1.95 million per acre. While this is a reduction on the post-pandemic peak, Colliers notes that land prices have held steady around this level for the past 12 months.
Len Rosso, head of industrial and logistics at Colliers, added: “The elevated borrowing costs as well as construction price inflation did put a dampener on investor appetite for speculative development.
“For the second half of this year we are forecasting only 4 million ft² of speculative development to be delivered, down 65% year-on-year.
“However as borrowing costs reduce and material costs stabilise, we expect investor appetite for development land to improve significantly over the second half of next year.”
