"Strong levels of take-up are ensuring that supply levels continue to fall and the current level of speculative development is not replenishing stock at a fast enough pace to satisfy demand"
Kevin Mofid, Head of Industrial & Logistics Research
Demand in the UK logistics sector remains strong
Summary
■ Demand in the UK logistics sector remains strong. By the end of the third quarter of 2016 more warehouse space has been transacted than by the year end of 2015, accounting for 26.2m sq ft.
■ Whilst a number of large deals have undoubtably pushed these figures on, there remains a significant amount of churn in the market as Savills tracked information on 39 separate deals, 70% higher than an average third quarter.
■ Strong levels of take-up and decreasing levels of speculative development have seen total supply fall by 22% year on year to reach 26.4m sq ft.
■ The make-up of existing supply has altered through 2016 as speculatively completed units enter our supply database, with 60% of the market made up of Grade B & C units, compared to 72% of the market just one year ago.
■ The investment market remains buoyant with £661m invested in the third quarter of 2016. With above average levels of transactions there is encouraging liquidity in the market given financial market volatility post Brexit.
■ Looking forward, the upcoming busy period for retailers will be a leading indicator as to whether the occupational market will continue its strong performance into 2017.
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