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Insights

UK Logistics & Industrial Outlook

The UK Logistics & Industrial National Outlook report analyses quarterly UK industrial and logistics property activity across the UK including demand, market supply and pricing trends with an outlook to future trends in this property sector. 

Overview:

Despite headlines around economic challenges, Q2 2022 was another exceptional quarter for logistics and industrial space.

Take‐up reached 16.2 million sqft in Q2, the second strongest Q2 total on record, bringing total take‐up for H1 2022 to 32.0 million sq ft. Occupiers remain focused on Grade A space, accounting for over 78% of total floorspace taken up in the half‐year, much of it as build‐to‐suit space in particular. Manufacturers have been highly acquisitive in Q2, taking space in all sizebands and regions across the country.

Following an exceptional volume of speculative development starts in Q1 2022, developers have continued with their programmes of speculative supply to the market in Q2 2022: another 3 million sq ft of space started construction in Q2 bringing the total space under construction to 16.3 million sq ft. Despite this new supply, such has been the level of occupier demand that availability fell back in Q2 2022 compared with Q1 and total available space is currently just 45.6 million sq ft, only marginally ahead of the record low of 44.8 million sq ft in Q4 2021. Rental growth has continued in Q2 with average growth across markets tracked by Cushman & Wakefield exceeding 4%.

Investors remain convinced of the sector’s strong fundamentals; however, as the wider investment market continues to experience repricing in the face of new market conditions (particularly in terms of financing costs), logistics & industrial assets are not impervious. As a result, we have seen the first outward yield movement in almost a decade. As this pricing discovery continues over the coming months, we anticipate 2022 volumes may be affected, albeit this will depend on the realignment of vendor aspirations in line with buyer expectations.   

Key Contacts

Richard Evans - London
Richard Evans

Head of Logistics and Industrial, UK
London, United Kingdom


+44 (20) 71525132

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Edward Cornwell - London
Edward Cornwell

International Partner
London, United Kingdom


+44 207 152 5103

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Timothy Stuart Crighton - London
Tim Crighton

International Partner
London, United Kingdom


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Christopher Jones
Christopher Jones

Partner
London, United Kingdom


+44 207 152 5014

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Sally Bruer (image)
Sally Bruer

Head of EMEA Logistics & Industrial Research & Insight
London, United Kingdom


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