RESEARCH

Big box bulletin

Half yearly update of distribution activity

H1 2020

Data & Analysis

Investment data

Occupier data

Key stats

Commentary

Andrew Jackson

Principal & Managing Director, Industrial

Robert Rae

Principal & Managing Director, Industrial

OCCUPIER MARKET IN BRIEF

The big box logistics market has been remarkably strong during the first half of 2020. Take-up of large grade A warehouses (>100,000 sq ft) amounted to 14.8 million sq ft during the first half of the year, 28% above the five-year, six-monthly average.

"Covid has led to an explosion in e-commerce. We expect online retailing to retain a substantial amount of the recent gains as more consumers have adapted to online shopping."

Tom Bridgman

Principal, Investment

INVESTMENT MARKET IN BRIEF

Industrial investment sentiment remains positive, with the strength of the occupier market reflected in investment activity. Unsurprisingly total investment volumes for distribution warehouses across the UK have fallen back in the first half of the year, amounting to £839 million, which compares to the five-year average of £1,610 million.

"The most notable deals were sale and leasebacks as occupiers were looking to release cash reserves. These have become increasingly popular since lockdown and we expect this to continue."

Regional analysis

East Midlands

The East Midlands continues to lead take-up across the UK big box market, totalling 5 million sq ft during the first half of 2020, comfortably eclipsing the six-monthly five-year average of 3.2 million sq ft.

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West Midlands

The pattern to demand in the West Midlands is similar to 2019. There was very little activity during the first half of the year but deals since the end of June and prospects for the rest of the year are significantly better.

London, South East & East

Take-up during the first half of the year in London, the South East and East amounted to 4.5 million sq ft, 65% up on the five-year six-monthly average.

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North West

North West take-up increased slightly from H2 2019 to total 913,086 sq ft in H1 2020.

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South West & Wales

There was no take-up across the South West and Wales in H1 2020 as COVID-19 stalled the market but this is also reflecting the limited availability of stock.

Yorkshire & North East

Take-up in Yorkshire and the North East was very impressive over H1 2020 with a total of over 3,662,538 sq ft.

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Scotland

The strength of industrial occupier demand in Scotland continues, with total take-up of 393,425 sq ft in three deals during H1 2020. This is just below the five-year six-monthly average.

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