Trading volumes in the logistics investment market faced a number of headwinds through 2019; namely political uncertainty, and the fact that as the market matures many developers have adapted their models to hold stock instead of trading.

It is therefore pleasing to report that investment volumes for distribution warehouses have reached £3.87bn for 2019, making it the second highest capital deployment ever, a rise of 9% on 2018 and pushes the three-year rolling average to the highest level ever recorded at £3.71bn.

Volumes were helped by two key portfolios which bookended the year, the first being the purchase of db Symmetry by Tritax in February, and the second being the purchase of the Tudor portfolio by Morgan Stanley in December for £241m, reflecting a net initial yield of 3.9%. However, the key driver of the market in 2019 was single unit sales between £10m and £35m, which reflected 42% of the market.

As we move into 2020, it is difficult to see investor interest in the sector wane given the continued strong occupier market dynamics and greater political certainty. The funding of speculative development in undersupplied markets will continue to offer an attractive discount to purchasing up and built investments.

_{Read the articles within Big Shed Briefing below.}