Almost 20m sq ft of UK big box space taken up in 2019
The UK logistics market saw a strong year in 2019 according to JLL. Big box take-up involving Grade A units of 100,000 sq ft and over reached 19.9m sq ft, matching the five-year annual average
According to JLL, the national vacancy rate stood at 9% at the end of 2019, up from 8% a year earlier. Over the course of 2019 available supply, including speculative space under construction, rose by 15%. Ed Cole, head of logistics, JLL commented: “2019 was a strong year for the sector, with take-up hitting the 20 million sq ft mark that we anticipated. Retailers continued to drive demand in the market and last year over a quarter of all Grade A take-up was in dedicated e-com facilities. Looking forward for this year, we remain positive about the logistics market, despite the expected economic and political headwinds.
Already at the start of the year there are a number of active requirements in the market which we expect to translate into further take-up this year and overall we are anticipating another year of solid demand for logistics floorspace.”
Jon Sleeman, director of UK research, JLL said: “Structural changes in the market and companies looking to restructure their supply chains drove demand for logistics floorspace last year and we expect to see these trends continue this year. We saw more speculative starts take place in 2019 and at the end of the year there was 5.1 million sq ft speculatively under construction. We expect to see further speculative development take place this year but overall, against a backdrop of good levels of demand in the market, we are not anticipating an increase in our national vacancy rate this year.
Commenting on the current investment market, Joel Duncan, director of capital markets, JLL said: “Despite a year of political uncertainty, the UK industrial and logistics market continued to present attractive opportunities for investors last year and remained the most resilient sector in the UK property market. Our preliminary figures estimate that industrial investment volumes reached around £5.9 billion in 2019, around 20% down on 2018. However, given that the total UK property market saw volumes fall by nearly 30% the industrial market was relatively robust. We expect investor focus will remain on prime UK locations as well as the most well specified assets during 2020.”
JLL will provide further data in its UK Big Box Logistics Market Update, which will be released later this month.
JLL (NYSE: JLL) is a leading professional services firm that specializes in real estate and investment management. Our vision is to reimagine the world of real estate, creating rewarding opportunities and amazing spaces where people can achieve their ambitions. In doing so, we will build a better tomorrow for our clients, our people and our communities. JLL is a Fortune 500 company with annual revenue of $16.3 billion, operations in over 80 countries and a global workforce of more than 93,000 as of September 30, 2019. JLL is the brand name, and a registered trademark, of Jones Lang LaSalle Incorporated.