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News Release

London

No sign of occupier appetite abating for Western Corridor industrial floor space

According to JLL’s H1 2015 Western Corridor Industrial & Logistics research


JLL’s latest Western Corridor Industrial and Warehouse Market report shows that the already spiralling demand for industrial and distribution space looks set to escalate, further squeezing the existing constrained supply in the area.​​​


Commenting on the research, Jon Sleeman, director of UK Industrial & Logistics Research at JLL, said: “The UK economy is forecast to grow 2.6% during 2015 and 2.4% in 2016.  London looks set to lead regional output and employment growth for the next five years, with the South East predicted to grow more strongly than the UK overall.  Given these forecasts we expect occupier demand for industrial and distribution space to increase in the Western Corridor due to the location’s excellent infrastructure characteristics.”

According to JLL’s research, take-up of industrial and distribution floorspace in the Western Corridor during the first half of 2015 was 6% up on the half-year average over the past five years. 1.5 million sq ft was taken-up in West London with 1.3 million sq ft taken-up in the Thames Valley.  Grade A quality space accounted for around 31% of all floorspace taken-up in the Western Corridor in H1 2015.  The average size of unit taken-up in the Western Corridor was 13,833 sq ft.

Andy Harding, director UK Industrial & Logistics​ at JLL, added: “With a good level of transactions already completed in Q3, we expect industrial and distribution floorspace take-up in the second half of the year to exceed H1’s level.  Supply has continued to diminish and Grade A availability is low, although further speculative development is expected in the next few years.  There are currently 13 schemes under construction in the Western Corridor totalling around 888,000 sq ft.”

JLL also predicts further rental growth with standard properties in both London and the inner South East set to grow by an average of 3.6% per annum over the five-year period from 2015 to 2019.  The research envisages that there is further potential for yield compression over the coming months as investors continue to target assets in key locations which are expected to see additional rental growth.  

Andy Harding concluded: “Looking forward over the next 12 months, the Western Corridor is likely to continue see strong activity from occupiers and developers and persistent strong demand from investors. As a result, its ranking as one of the UK’s leading industrial markets looks secure.”