Industrial & Logistics Review Q3 2019
While not immune to broader economic and political challenges, the outlook for industrial and logistics remains solid, with the sector continuing to outperform other commercial property assets.
- Industrial and logistics take-up in Q3 2019 reached 7.99m sq ft (100,000-plus sq ft units). Leasing activity was up 44% year-on-year, with total 2019 take-up set to come in just shy of the 5-year average of 29.2m sq ft.
- Speculative development in 2019 is on track to surpass this cycle’s previous record of circa 9.0m sq ft set in 2016.
- Investment volumes in Q3 2019 reached £1.46bn, up 20% on Q2. This brings annual volumes to £4.56bn as of end-September, 24% down on the same period in 2018.
- 2019 has seen fewer portfolio and big grade-A logistics deals due to a combination of long-term supply constraints, political uncertainty, and a reluctance among traditional developers to trade prime sites.
- Prime logistics yields for long-let assets with strong covenants remain firm, with little sign of outward movement.