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News Release

LONDON

Multi-channel retailing drives big box take-up


Latest JLL research reveals that retailers accounted for the largest share of total take-up in the UK big box logistics market with a number of big brands and multi-channel retailers signing for large built to suit units in H1 2015.

John Lewis signed for a 644,000 sq ft unit at Magna Park, Milton Keynes earlier this year, its third distribution centre at this location,  TK Maxx signed for a 635,000 sq ft unit at Crosspoint in Wakefield and Dunelm took a 535,000 sq ft building at Stoke-on-Trent. Logistics companies accounted for 28% of take-up and manufacturing companies accounted for 12%.  ‘Other’ companies recorded 11% of total take-up in H1.

Overall, occupier take-up of Grade A logistics floorspace totalled 8.5 million sq ft in the first half of 2015, 35% lower than H2 2014 (13.2 million sq ft) but 36% higher than H1 2014 (6.3 million sq ft). The second half of last year saw a number of large transactions complete, with six deals over 500,000 sq ft, including two over 900,000 sq ft .

Richard Evans, Joint Head of National Logistics at JLL commented:

“The retail sector was again the largest source of demand in the first half of the year and, in particular, online retail continues to be a driver of this demand.  For example, in the first six months of this year Ocado (621,000 sq ft), Amazon (310,000 sq ft) and Clipper Logistics (342,000 sq ft for a ZARA online contract) all took large distribution facilities. In addition, internet-related requirements make up a significant proportion of the 82 current active requirements we are tracking nationally. These include both retailers and a number of parcel companies whose requirements are usually driven by the growth of internet retail. The facilities required by the latter are often very land hungry so floor space requirements from these operators typically result in a larger land take than conventional buildings.”


Jon Sleeman, Head of UK Industrial & Logistics Research at JLL said:
“The short-term outlook for demand looks solid with 82 named active requirements for Grade A logistics buildings of 100,000 sq ft and over identified by JLL nationally.  These requirements total between 22.4 million sq ft and 29.2 million sq ft, more than twice the level of available Grade A space (11.2 million sq ft) on the market, which includes 3.4 million sq ft of available space speculatively under construction.”


Cameron Mitchell, Joint Head of National Logistics at JLL commented:


“With strong demand and limited availability, prime logistics rents are rising in certain core markets notably in the South East and Midlands.  To date speculative development has been quite modest, but we expect this to pick up over the next 12 -18 months.”


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