High demand for industrial space defies Brexit fears

Industrial take-up hit 7m sq ft in the third quarter of 2016, defying fears of a downturn in the wake of the Brexit vote.

The figure was in line with the five-year average for the sector, with robust occupier and investor demand seen across most regions, according to Cushman & Wakefield.

E-commerce was a significant source of activity as occupiers sought logistics space in urban fringes to provide last mile fulfilment.

Demand was also robust for mid-size and cross-dock facilities in both prime and second-tier locations as occupiers sought to optimise their distribution networks across the UK.

Strong speculative demand

In the West Midlands, occupiers have taken almost 6m sq ft in the first nine months of the year. Demand for grade A space has seen availability drop by a quarter over the past six months.

However, after years of declining supply, development has now increased and the amount of grade A space available across the country is up 17% in 2016.

Speculative development has taken place in the South East, Midlands and North West where demand from occupiers is strongest.

Despite the rise in available space, Cushman & Wakefield said most regions are still struggling to keep up with demand and that rents are likely to increase in 2017.

Simon Lloyd, industrial and logistics partner at Cushman & Wakefield, said: “The UK is at the forefront of the growth in e-commerce which is accounting for an ever-increasing amount of sales.

“This has led to many companies re-organising their operations and setting up separate warehouses, often in multiple regional locations, specifically to deal with internet sales.

“Together with the rapid growth of a number of online-only retailers such as Amazon and Wiggle, this has ensured the robust market we are now seeing.”

Regional Shed Spotlights - check out the view across the regions

Related Articles

Have your say

Sign in to make a comment on this story.

Sign In

Text size

Desktop Site | Mobile Site