Brexit uncertainty will be the major factor hanging over the consumer economy in the short term, though there is little evidence that is has affected spending or saving behaviour to date. We expect a slight acceleration in sales growth in line with the improving real income story.

Retailers will remain cautious, particularly in relation to a potential slump in the pound if Brexit becomes disorderly. However, vacancy rates remain low in relation to previous weak points in the cycle, and tenant demand from discounters will remain steady.

Discount retailers will continue to be the most expansionary retailers in the retail warehouse space, and their performance could be boosted if shoppers swing towards a more cautious stance.

We expect that rental growth will be negative in 2019 and 2020, before starting to recover in 2021. Overall we predict that retail warehouse rental growth will be more resilient than some other parts of the retail market.

Investment activity will be swelled this year by an increasing number of opportunistic or repurposing buyers in the market. While further yield rises are inevitable, the attractions of the sector are becoming increasingly well understood. In particular we expect a resurgence in investor demand for rack-rented assets, or those where the rents can be re-based as a result of a lower entry price.