MARKET INTELLIGENCE
Big box bulletin
Q1 2024: Review of distribution activity
Panattoni Park, Swindon
Data and analysis
Commentary
In Q1 2024, take-up of big-box (100,000 sq ft+) grade A units totalled 4.7 million sq ft, a 16% decrease year-on-year (YoY) and 33% lower than the 5-year (Q1) average. During the quarter, the Midlands remained prominent, particularly locations within the "Golden Triangle," which accounted for 59% of activity. The elevation of grade A availability appears to be moderating as by Q1 2024, grade A availability stood at 47.9 million sq ft, representing only a 1% increase on the year-end 2023 figure. The moderation has been helped by a slight decline in second-hand stock returning to the market, falling from just over 16.8 million sq ft at the end of 2023 to 16.6 million sq ft by the end of March 2024. However, the proportion of smaller and mega shed supply remains skewed to smaller units (100,000 - 399,999 sq ft) which represent 91% of all units.
Despite rising stock and a distinct disproportion of shed sizes available, particularly in prime locations, prime headline rental growth has remained robust. Regions experiencing the most significant growth have been the North West, London/South East and East and West Midlands – with the latter now pushing through into double-digit rents. Investment into the single-let big-box distribution market remains sparse as investors remain hesitant amid current macro headwinds, falling 63% versus the same period last year and 71% lower than the 5-year (Q1) average. Active players included Clarion Partners, Tritax Symmetry and Brookfield Asset Management, contributing 74% of the quarter's investment volume.
“Despite rising stock and a distinct disproportion of shed sizes available, particularly in prime locations, prime headline rental growth has remained robust. Regions experiencing the most significant growth have been the North West, London/South East and East and West Midlands – with the latter now pushing through into double-digit rents.“
Andrew Jackson
Principal & Managing Director, Industrial
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