It’s no secret that the industrial and logistics sector is booming. Take-up in the first half of the year continued to soar and investment activity also sky-rocketed to a new record high of £6bn, according to data from Knight Frank. That’s 54% more than the previous high recorded in H1 2018.

Grace Howarth

Grace Howarth

Rents are also on the up. Savills data shows that in Yorkshire and the North East, prime quoting rents have risen by more than 16%. It is anticipated they will continue to grow and exceed forecasts over the next few years due to a shortage of stock, the rising price of construction materials and increased competition for space – the national average vacancy rate for industrial space is currently just 4.8%.

This combination of factors could see some occupiers consider alternative locations across the UK. They may even opt to take space in the type of ‘beds-and-sheds’ schemes being brought forward by developers like Regal London. The industry needs more enterprising developers and investors to take a chance and deliver speculative development in those areas where the supply shortage is most severe. However, many will be reluctant to spend having been affected by the financial crisis. Some industry experts are also concerned about the impact the new biodiversity net gain calculations may have on development appraisals.

It is unlikely that the current boom will slow down any time soon, but there is a growing danger that the industrial and logistics sector could be a victim of its own success if occupier take-up and investment activity continues to grow at its current rate.

Grace Howarth is Property Week’s market reports editor