Midlands dominates warehouse take-up

By Liza Helps Property Editor Logistics Matters

THE RESEARCH noted that the take-up of grade A big-box distribution units totalled some 21.2 million ft2, an 11% increase from 2023. Despite remaining 33% below the five-year average – a comparison skewed by exceptional demand during the global pandemic – improving occupier sentiment and a surge in deal-making helped push volumes above last year’s levels.

At the close of the year Avison Young saw supply hit 51.6 million ft2 across 220 units  an increase of 9% year on year. However, nearly 40% of the space available is second hand with a similar amount newly completed. A further 20% remains under construction.

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With the majority of available space under 400,000 ft2, there remains a dearth of  mega box warehousing – there are only 22 units of 400,000 ft2 or larger currently available.

Avison Young Principal and Managing Director, Industrial and Logistics David Willmer, said: “Despite high stock levels and an imbalance in shed sizes, prime headline rental growth continues to be resilient, particularly in prime locations, underlining the strength of the industrial and logistics market.”

The research predicts a rental growth rate of 4.3% over the next five years for the logistics sector, outpacing office (3.4%) and retail (1.8%) sectors, driven by sustained demand in prime locations.