Industrial and logistics take-up for 2019 reached 30m sq ft, exceeding the 10-year annual average by 17%.
The data from Colliers’ latest industrial and logistics report shows that design and build accounted for a 53% of 2019 take up while second-hand units accounted for 27%, the lowest share on record, and speculative warehouses accounted for 20%.
Colliers predicts total take-up in 2020 could be close to 2018’s 34.6m sq ft because of the release of pent up demand.
“2019 was a very challenging year for business planning. Political uncertainty and exchange rate volatility made it extremely difficult for businesses to commit to large capital expenditures,” said Len Rosso, head of industrial and logistics at Colliers International. “Nevertheless, the sector has been supported by strong occupational demand driven by retail occupier’s requirements to future-proof supply chain operations. In this regard, provisional take-up figures for large distribution warehouses greater than 100,000 sq ft topped 30m sq ft, in line with the five-year average.”
“Looking forward, investors will continue to search for yields in a low-rate environment, driving further capital growth for the sector in 2020,” added Andrea Ferranti, head of industrial and logistics research at Colliers International. “We expect London assets to capture most of this upside and the market will see more UK wide portfolio transactions as international buyers look for ways to enter the UK industrial sector.”