Abstract
Most regional markets see above average and record take-up levels
- Nationwide deal counts remain in line with long term averages meaning that transaction activity reached 16.4m sq ft for the first half of the year, a third higher than the long term average.
- For the moment demand and supply remains in equilibrium as supply in the UK has fallen in 2018 and now stands at 27.7m sq ft, reflecting a vacancy rate of just 5.8% nationally.
- Demand has come from a wide range of tenants including grocery, high street and online retailers but also the manufacturing sector with a number of deals to modular homes manufacturers.
With 9.1m sq ft currently under construction across the country, investors and developers should be prepared to see vacancy rates enter a period of greater volatility
Kevin Mofid, Head of Industrial & Logistics Research
- There is 9.1m sq ft of speculative space currently under construction or due for delivery in the remainder of 2018 and into 2019.
- We expect there will further speculative announcements in the second half of 2018 that will increase that number further and therefore increase vacancy rates.
- Investment stock supply remains a bottleneck to higher investment volumes as £1.58bn was transacted in the first half of 2018, a 31% decrease on the same period in 2017. However, volumes are still 70% higher than the half year average of £0.93bn.