UK Big Box 2022

JLL’s research reveals another year of strong occupational demand for the UK Big Box Industrial and Logistics Market

January 17, 2023
  • Oliver Jones
  • Jon Sleeman
  • Ed Cole

The UK industrial and logistics market posted another year of strong occupier demand with some 32.4 million sq ft of space taken up over 2022 in Grade A buildings of 100,000 sq ft and over. This was the third consecutive year in which grade A take-up exceeded 30 million sq ft, highlighting market resilience in the face of economic headwinds. It was the third highest level of take-up recorded by JLL following 35.8 million sq ft in 2020 and 35.4 million sq ft in 2021. With supply still lagging demand, prime headline rents rose by 12.9% over the year.

In 2022 total Grade A take-up hit 32.4 million sq ft in comparison with 35.4 million sq ft in 2021. This was the third consecutive year of take-up over 30 million sq ft. Total take-up comprised of 27.8 million sq ft of new space (86% of the total) and 4.6 million sq ft of second-hand (14% of the total).

E-commerce accounted for 13% of all take-up in 2022, a much lower share than recorded over the past two years (c 40% in each year), as the value of internet retail sales slipped back (year to November 2022) and demand from certain leading online retailers moderated.

Total available supply including space speculatively under construction at end-2022 stood at 27.5 million sq ft, compared with 18.7 million sq ft at end-2021.

The vacancy rate including speculative space under construction at the end of 2022 was 6.4% against 5.5% at the end of 2021, whereas the vacancy excluding this space was 2.5% in comparison to 1.1% at the of 2021.

Ed Cole, Head of UK Logistics Agency at JLL said, “2022 demonstrated strong market resilience with take-up of 32.4 million sq ft, the third highest annual level we have recorded and only exceeded by take-up in 2020 and 2021. The year saw a significant diversity of occupiers take space, which made up for the much lower level of demand driven by e-commerce. With supply still lagging demand, prime headline rents posted a 12.9% uplift. Despite economic headwinds we think occupational market fundamentals remain strong.”

Jon Sleeman, Head of UK Industrial & Logistics Research at JLL added, “The economic outlook suggests that growth will lessen as a demand driver, but we believe that demand for space will be supported by lease events, strategic supply chain changes and increasing demand linked to corporate ESG goals. The latter includes the need to decarbonise facilities and improve these from a social perspective to retain and attract staff.”

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