The industrial and logistics market has slowed, but there is still plenty of growth in pockets.
Considering the political and economic uncertainty in the UK – with a third general election in four years around the corner and a third Brexit deadline looming – that’s quite a feat.
In London, light industrial rents are continuing to soar. Across the country, microbreweries have evolved from ramshackle operations crafting hoppy IPA underneath railway arches into occupiers of large, custom-built, high-spec warehouse units. And then there is the emergence of ‘dark kitchens’, which are starting to appear on industrial sites as food delivery companies race to keep up with growth in online orders.
This growth is being fuelled by innovation. Stenprop’s Julian Carey notes in his column that occupiers are becoming much more diverse as hauliers and supermarkets begin sharing space with photography studios and medical facilities. Sheds themselves are also changing fast. JLL says it is aware of 30 examples of what it calls warehouse “intensification” at various stages of planning, pre-planning and development happening across London, including multi-storey, multi-level and mixed-use sheds.
As Warehouse REIT’s Andrew Bird puts it in his first interview since the company’s IPO back in 2017: “There’s a stark contrast between the noise and confusion coming out of Westminster and the business that is being conducted by SMEs across the UK.” While Boris may be struggling to “get Brexit done”, the industrial and logistics sector is getting on with things.
Mitchell Labiak is Property Week’s market reports editor
Industrial & logistics supplement November 2019
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