UK logistics and industrial market remained strong in 2019, according to a report by JLL. Big box take-up involving Grade A units of 100,000 sq ft and reached 19.9m sq ft, and the national vacancy rate stood at 9% at the end of 2019, up from 8% a year earlier.
Over the course of 2019 available supply, including speculative space under construction, rose by 15%.
”2019 was a strong year for the sector, with take-up hitting the 20 million sq ft mark that we anticipated. Retailers continued to drive demand in the market and last year over a quarter of all Grade A take-up was in dedicated e-com facilities. Looking forward for this year, we remain positive about the logistics market, despite the expected economic and political headwinds,” commented Ed Cole, head of logistics, JLL.
”Already at the start of the year there are a number of active requirements in the market which we expect to translate into further take-up this year and overall we are anticipating another year of solid demand for logistics floorspace,” he added.
Jon Sleeman, director of UK research, JLL said:”Structural changes in the market and companies looking to restructure their supply chains drove demand for logistics floorspace last year and we expect to see these trends continue this year. We saw more speculative starts take place in 2019 and at the end of the year there was 5.1 million sq ft speculatively under construction. We expect to see further speculative development take place this year but overall, against a backdrop of good levels of demand in the market, we are not anticipating an increase in our national vacancy rate this year.”
”Despite a year of political uncertainty, the UK industrial and logistics market continued to present attractive opportunities for investors last year and remained the most resilient sector in the UK property market.”
Commenting on the current investment market, Joel Duncan, director of capital markets, JLL said:”Despite a year of political uncertainty, the UK industrial and logistics market continued to present attractive opportunities for investors last year and remained the most resilient sector in the UK property market. Our preliminary figures estimate that industrial investment volumes reached around £5.9 billion in 2019, around 20% down on 2018. However, given that the total UK property market saw volumes fall by nearly 30% the industrial market was relatively robust. We expect investor focus will remain on prime UK locations as well as the most well specified assets during 2020.”