The UK industrial and logistics property market continues to show strength as we move into Q3 2024. The market is performing healthily building on the positive trends that we have seen in Q1 and Q2. Despite the challenges faced in 2023, the sector has bounced back, showing resilience and adaptability.
Table of contents
Industrial and Logistics Property Market Performance
Rising Demand for Quality Industrial Space in 2024
Industrial and Logistics Market Forecast for Q3 2024
How FI Real Estate Management Can Help
Conclusion
Industrial and Logistics Property Market Performance
As we can read in Cushman & Wakefield’s outlook, Q2 2024 saw a continuation of the strong performance observed in Q1. The first quarter recorded 55 transactions of logistics and industrial units sized at 50,000 sq ft or larger, totalling over 9 million sq ft. This trend continued in Q2, with transaction numbers remaining above both the same period in 2023 and the 10-year average for the quarter.
The total available space has continued to decrease. This trend began in Q1 2024 for the first time since 2022. By the end of Q2, available space stood at approximately 63.2 million sq ft, down from 64.8 million sq ft at the end of Q1.
For businesses looking to rent industrial space, this trend indicates a competitive market. While there's still good availability, the decreasing total available space means it will be more difficult to secure popular locations and high-quality units. We advise you to start your search early and get the best properties.
Rising Demand for Quality Industrial Space in 2024
The 'flight to quality' trend remains a key feature of the market. Grade A space accounted for 70% of all take-up in 2023, and this trend has continued through the first half of 2024.
Businesses are increasingly looking for ESG-compliant spaces, driving demand for modern, efficient properties. For example, properties like those at Wrexham Industrial Estate, F Lloyd Penley or Botany Bay Business Park, with strong BREEAM ratings. They continue to be popular among tenants looking to reduce their carbon footprint. While these may come at a premium, they offer long-term benefits in terms of energy efficiency, employee satisfaction, and compliance with evolving regulations.
Industrial and Logistics Market Forecast for Q3 2024
The industrial and logistics sector is expected to remain strong in Q3 2024. Major e-commerce players are projected to continue driving demand, particularly for strategically located facilities near urban centres. Available space is forecast to tighten further, with vacancy rates potentially dropping. Rental rates are predicted to see moderate growth, especially in key logistics hubs near major metropolitan areas. Overall, the sector outlook remains positive.
For those businesses which are considering new locations, this highlights the importance of strategic positioning. Properties in central areas or those with good transport links may request higher rents but on the other hand, they could offer significant operational benefits and access to larger customer bases. With these current market conditions, businesses looking to secure new industrial space should act quickly. The high demand for Grade A space means that the best units are likely to be in extreme shortage in the coming months and years.
How FI Real Estate Management Can Help
At FI Real Estate Management, we understand the importance of finding the right space for your business. With over four decades of experience managing more than 15 million sq ft of commercial and industrial real estate, we're well-positioned to help you find the ideal property.
Our diverse portfolio includes everything from flexible office spaces to industrial warehouse spaces to rent. We take a people-first approach, listening to our tenants' needs and providing spaces that allow businesses to reach their full potential.
In the photo: Botany Bay Business Park
Conclusion
As we move into Q3 2024, the outlook for the industrial and logistics property market remains positive. The continued demand for high-quality and well-located spaces suggests that securing the right property now could be a smart move for many businesses.
To explore our range of available industrial properties and find the perfect space for your business, visit our website at fi-rem.com or get in touch with our team today.