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Industrial and Logistics Property in High Demand

Industrial and Logistics Property in High Demand
26 April 2021
 

The number of logistics and industrial property leasing deals was 70 per cent higher than usual in Q1 of this year.

New data from Cushman & Wakefield suggests that demand for UK logistics and industrial space shows no sign of slowing as transactions in the first quarter of 2021 increased by 115 per cent compared to the same period last year.

12.5 million sq ft of industrial and logistics space was transacted in the first quarter of the year. A further 16 million sq ft was under offer at the end of March 2021, with e-commerce accounting for over 50 per cent of the total.

Overall, during the last year, over 58.3 million sq ft of space has been taken, compared to an annual average take-up pre-COVID of 33 million sq ft. 

 

"While growth might slow as the country emerges from lockdown, many ‘occupiers’ of the digital economy are still playing catch-up and requiring more space to cope with high levels of demand."

–Bruno Berretta

Associate, UK Industrial & Logistics Research and Insight, Cushman & Wakefield

 

Retail and Parcel Delivery Responsible for Demand

 

Retailers, parcel delivery and third-party logistics continued to drive demand, together accounting for almost 70 per cent. of quarterly take-up. In London and South Wales, several recent requirements continue to emanate from film studios. In and around London they have taken nearly 1 million sq ft since 2019.

The largest deal of the quarter was Amazon’s letting of 700,000+ sq ft at Knowsley Business Park. 

Richard Evans, Head of UK Logistics and Industrial at Cushman & Wakefield, said: “With over 16 million sq ft of space currently under offer at the end of the first quarter, 2021 is shaping up to be another strong year for the logistics and industrial sector and developers have been quick to respond to the recent surge in demand. The market response to the pandemic and ensuing lockdowns has boosted confidence, evidenced by many new speculative developments across the country.”

Bruno Berretta, UK Industrial & Logistics Research and Insight at Cushman & Wakefield, added: “E-commerce has accounted for 40 per cent of take-up since the beginning of the pandemic – double pre-COVID levels. While growth might slow as the country emerges from lockdown, many ‘occupiers’ of the digital economy are still playing catch-up and requiring more space to cope with high levels of demand. In London, besides pure-play e-commerce and parcel delivery companies, we are seeing several requirements coming from online groceries, dark kitchens and data centres operators, and we see this demand continuing over the next months.”

ThisWeekinFM recently spoke to  Louise Rushmer, who is a Partner at Cushman & Wakefield where she heads up the Property and FM Corporate Portfolio. Watch the Spotlight Interview here. 

Picture: a photograph of a forklift truck taking a delivery from the rear of a vehicle

Article written by Ella Tansley | Published 26 April 2021

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