STRONG INDUSTRIAL AND LOGISTICS PROPERTY PERFORMANCE IN 2024

The UK industrial and logistics property market has performed strongly in the first half of 2024. The challenges of last year are behind us and the data shows that market activity is healthier, making this an ideal time to rent industrial property.

Impressive Transactions in Q1

In the first quarter of the year, 55 major industrial transactions were recorded by Cushman & Wakefield. These are rent agreements for units 55,000 sqft or larger. In total, more than 9 million sqft was traded in the first quarter of the year, and Q2 appears to be progressing just as positively. 2024 is already ahead of 2023 in this regard, and another good quarter will reinforce the impressive year we are having so far.

Reduced Available Space

Those good results are in turn reducing the amount of available space for rent. With just 64.8 m sqft available, this is the lowest level since 2022. However, this has not been caused solely by high levels of take-up.

Renovation of Grade C and B Spaces

When we examine the type of unit being snapped up, we can see that a large amount of Grade C and B space is being removed from the market entirely – not because it is rented, but because it is being renovated. The ‘flight to quality’ is one of the most significant trends of recent years in the industrial and logistics real estate sector, and it explains why so much investment is being made in existing stock.

Trend Towards Grade A Quality

Approximately 70% of all space taken in 2023 was Grade A quality, and that trend is holding up so far over 2024. With that in mind, it is no surprise to see lower quality stock being taken offline for refurbishment and upgrades. Building developers and landlords will not want their property sitting there, so they are actively increasing the quality and improving the offer for potential tenants.

DEMAND FOR SUSTAINABLE INDUSTRIAL SPACES

Companies are looking for sustainable space which lowers their environmental footprint. ESG reporting is real, as is the growing realisation that all areas of the economy and our day-to-day lives need to be decarbonised and made kinder to the environment. Industrial property is no exception, and business owners are showing what the future looks like by paying for better, more sustainable spaces.

Popularity of Smaller Industrial Spaces

Another insight we can glean from the data is that smaller industrial spaces are proving popular. CBRE reports that the average deal size in the quarter according to the data was 223,000 sqft which is lower than the 12-month average.

This is likely to be the case for two reasons. Firstly, smaller firms are moving more to secure better properties. Secondly, the rise of e-commerce means that large distributors are renting space that allows them to reach everywhere in the country fast. In many cases, that means a greater number of smaller warehouses rather than one big warehouse space.



Put those factors together, and you have a market that is looking for smaller, more environmentally friendly industrial and logistics properties. Businesses want ESG friendly buildings that offer smaller, more versatile spaces.

Botany Bay Business Park

Botany Bay Business Park is purpose-built to be a home for modern industry. Comprised of 33 high quality units from 1,300 sqft to 158,000 sqft, this is a plug-and-play potion that is ideal for businesses of all sizes, from start-ups to established enterprises looking to expand.

It is also highly sustainable having achieved a high BREEAM rating, and also due to features like cycle storage and EV charging. Add in the on-site café, bar and restaurant and you have the perfect mix of size, sustainability and attractiveness that should help you find the best employees.

Located just off the M61, this is also a location which is ideal for reaching the entire North West and beyond with ease.