Investor demand for the sector remains polarised, with strong demand for prime and opportunistic assets
■ We expect that the overall rate of growth in consumer spending will start to slow later this year. However, spending on retail warehouse goods is still expected to grow at an average of 5% per annum over the next five years.
■ Occupational demand is strongest in the bulky goods sectors, with furniture retailers currently particularly expansionist. We are also seeing strong demand from the value sector.
■ Improving demand and restrained supply is putting upward pressure on rents, and downward pressure on rent free periods. We expect this story to continue in the remainder of 2016.
■ The end of capital value growth bounce in this sector has meant that returns from retail warehousing have been comparatively weak. However, the rental growth story is improving, and the income return on offer from retail warehousing is beginning to look attractive.
1 article(s) in this publication
