The industrial and logistics market continues to be resilient despite the many geopolitical and economic headwinds converging on the commercial real estate asset class as a whole.

It is therefore encouraging that investment volumes for distribution warehouses have reached £3.55bn for 2018, marginally lower than 2017. The three-year rolling average has now reached a new height of £3.32bn, the highest level ever recorded and up from £2.1bn just five years ago.

By almost every metric 2018 mirrored 2017 – deal count, average lot sizes and the proportions of deals within certain ranges were all broadly in line with last year. 2018 did however lack larger portfolio transactions over £300m, with two of that scale in 2017.

The largest single-let transaction of the year was Tritax’s forward funding of a 1.99m sq ft Amazon facility in Durham. Upon completion, Amazon will take a 20-year lease at a rent reflecting a net initial yield of 5.25%.

Savills prime yields have remained largely static for the last 12 months and now stand at 4.25% for prime single-let logistics units and 4.00% for multi-let industrial estates, the lowest level ever seen.

As we move through 2019, we expect that continued Brexit uncertainty will see some investors pause for thought until greater clarity emerges although given the sustained popularity of the sector amongst investors it is difficult to envisage any significant adjustment in pricing, notwithstanding any political or economic shocks.