As the year progresses, anecdotal evidence does suggest that institutional investors are still targeting the UK industrial and logistics sector and actively seeking to deploy capital in this sector.
However, despite a strong end to 2014 for the industrial and logistics sector, UK investment volumes for the first quarter were down 27 per cent, reaching £602 million. Given that the availability and quality of stock on the market is limited, it comes as no surprise that investment volumes for the first quarter are a little subdued.
The current market cycle has thrown up some interesting factors for the investment market. We are seeing many of the large-scale developers choosing to hold their prime development stock where traditionally they would have been traded on practical completion, or sooner if a prelet has been secured thereby creating a further lack of stock in the investment market. The same is true of investors who are funding speculative development in the current cycle – we expect this stock to be held in the short to medium term.