Demand for UK industrial buildings over 100,000 sq ft (9,290 sq m) set a new record for the sector in the second quarter. Activity was 39% up year on year and transactions totalling 16.1 million sq ft (1.5 million sq m) took place, according to research from Colliers.
Colliers said that the sector’s total take up for the first six months of 2021 reached 24.4 million sq ft – slightly ahead of last year’s figure.
Appetite for industrial assets remained unabated and is driven by continuing demand from e-commerce operators, alongside businesses expanding their logistics networks. There has been a “flight to prime” said Colliers, with only 25% of take up being second-hand stock. Design and build space accounts for 41%, speculative schemes for 34%.
Meanwhile, Colliers notes that Q2 supply was down 26% year on year at 25.2 million sq ft. Only three warehouses over 500,000 sq ft were available (compared to six in Q2 20), and 80 assets in 100-199,000 sq ft bracket on the market (compared to 100 in Q2 20).
“The good news is that investors and developers are building, and there are just shy of 60 planned deliveries of units over 100,000 sq ft from Q4 21 through to 2022,” said Colliers’ head of industrial and logistics Len Rosso.