Confidence will undoubtedly continue to improve over the course of 2015. The retail warehouse sector will arguably benefit more from the recovery in the UK housing market than the high street.

We expect that overall rental growth will remain broadly flat in 2014, but behind this there will be some locations where supply shortages will drive rents back to and above their previous peaks.

Secondary and tertiary locations will continue to see falling rents this year, but by 2015 we expect that the average rental growth for the sector as a whole will be positive.

Our current forecast for average annual rental growth for all retail warehousing is now just under 2% pa for the period 2014-18. Investor demand will remain strong, particularly for the very limited supply of prime assets.

As a result of this we expect that prime yields will harden by a further 25bps this year, with average yields following a similar trend with a lag of around a year. Total returns on retail warehousing are expected to continue to be better than most other retail segments.

Taken from
Spotlight: UK Retail Warehouse Market - September 2014