With recent headlines about the high street and retailers trading updates starting to filter through it would be tempting to suggest that the logistics property market might be experiencing similar headwinds.

It is pleasing to report that take-up in 2018 has risen by more than 8m sq ft year-on-year and take-up related to retail (in all its forms) accounted for 53% of this demand.

We expect that this trend will continue into 2019 and beyond as retailers continue to get their supply chains fit for purpose in the multi-channel world. Both Next and Marks & Spencer have announced they will be spending hundreds of millions of pounds on their supply chains in the coming years.

We should make note of the growth of new entrants to the market, such as Wayfair.com who are increasing the amount of warehouse space they need at exponential level.

Lastly, we are not currently seeing Brexit have a significant impact on occupier demand, either positive or negative. This may change as more clarity emerges on the UK’s post 29th March trading arrangements, but occupiers should be comforted by the fact that supply levels are now at their highest level since 2014.

Take-up

At a nationwide level, take-up reached 34.1m sq ft for 2018 a 32% increase on 2017 and 14.1m sq ft above the long-term average.

Whilst the actual deal counts were marginally up, the average deal size is at its highest level ever and now stands as 281,000 sq ft.

New records were set in many markets including the East Midlands, Yorkshire, the North West and the South East.

Supply and Pipeline

Nationwide supply has risen in 2018 and now stands at 31.4m sq ft, reflecting a vacancy rate of just 5.3%. Of the current supply on the market, 51% is classified as Grade A, up from just 35% in Q1 2015.

We expect this balance to alter further in favour of Grade A units in 2019 as 2018 saw a record number of speculative development announcements; 55 units were announced totalling 11.3m sq ft. Of the units due for delivery 67.5% are under 200,000 sq ft.

_{Read the articles within this publication below}