The Property Perspective | UK Logistics H1 2017
- Following a record year for take-up in 2016, the momentum continued into the first quarter, before deals volume began to slow in Q2. Overall 8.81 million sq ft was acquired for occupation in units of 100,000 sq ft and above.
- There has been a notable increase in deals within the smallest size band of 100-200,000 sq ft, reflecting the growing interest in urban logistics.
- Logistics remains a popular real estate asset class, with total sales of single assets of £1.20bn, not far off the £1.33bn achieved over the same period in 2016. More overseas buyers are active, and the sector has also attracted many new names, not previously active within the industrial sector.
- The first half of 2017 saw logistics properties once again perform strongly. The total return of the six months to the end of June 2017 was 5.0%, a marked improvement on the 4.1% achieved in H2 2016. Over the past twelve months, logistics assets have produced a total return of 9.3%.
Ben Thomas of CBRE Valuation commented
“The logistics sector had another strong half year, continuing the trends we have seen over recent years and reflecting a very similar performance level to that seen in both halves of 2016. Investment appetite remained strong in the sector with a broad spectrum of investors active in the market. This strong investment appetite coupled with the continued of rise of rental values and an imbalance of supply and demand characteristics in the occupational market has seen yields compress during H1.”