Rising rents for occupiers 

By Liza Helps Property Editor Logistics Matters

IN ITS latest Industrial Rents Map update Colliers identified that average prime rents across the UK for large distribution warehouses (100,000+ sq ft) rose to £11.50 per sq ft, reflecting a year on year increase of 5.4%.

Prime headline rents for mid-box and multi-let units reached £15.15 per sq ft, up 4.3% year on year.

Colliers Head of Industrial & Logistics Len Rosso noted: " Due to global economic headwinds, the past few years have been somewhat challenging for occupiers and investors alike. What is encouraging however, is the robust demand for prime space in core markets, is translating in take-up figures in line with the long term average."

This in turn is generating significant rental growth.

Take up figures according to Colliers rose 15% year on year to 27.4 million and with similar  take up expected in 2025 coupled with a marked decline in speculative space down from 20 million in 2023 to 9 million in 2024 and a further 9 million ft2 expected for 2025 – rents are  expected to  continue to rise.

Colliers Head of Industrial & Logistics Research Andrea Ferranti, added: “We have long observed that there would be a slowdown in speculative development as a result of market conditions. High borrowing costs for developers have kept a lid on land values and while recent Bank of England rate cuts signal a potential turning point, current financial market expectations of higher inflation and subdued GDP growth are driving bond yields upward, tempering optimism and slowing the pace of recovery.”