commercial property lambert smith hampton

News - 03/10/2016

Internet shopping driving logistics demand

Activity in the industrial and logistics sector showed a mixed picture in the post-Referendum landscape. Lambert Smith Hamptons’s definitive Industrial & Logistics Market H1 2016 Update indicates that while the result prompted an immediate downgrade to the near-term outlook among leading forecasters, the sector has returned to ‘business as usual’.

Find out more

Structural change in demand has continued apace, with retail and wholesale occupiers accounting for 58% of take-up in H1 2016, boosted by the three largest deals of the year, with The Range, Amazon and Lidl committing to major design and build units. Pure-play online retailers were responsible for 50% of retail and wholesale demand, with Amazon alone taking 2.4m sq ft of space in H1, and subsequently committing to a substantial 2.2m sq ft at London Distribution Park, Tilbury, in Q3. 

UK‐wide availability continues its downward trend, albeit, the fall in H1 was the smallest since 2011. Overall supply reduced by 1%, with grade A availability decreasing by 4% to stand at 16.5m sq ft, reflecting the demand for high quality space. Many speculatively built units were let during construction but 20 spec schemes that completed in H1 are available.

Steve Williams, National Head of Industrial & Logistics, commented, “Property markets dislike uncertainty, and we saw this as activity was slightly down, however, new grade A space seems to be trading at a premium to secondhand, with a clear focus on quality shown by all major occupiers.

“Having the right product in the right place has never been more important. With retailers driving demand, maximizing efficiencies in their supply chain, and parcel carriers underpinning retail delivery, the average size of new-build units has decreased by 60% since the peak of the last development cycle. 

“Although we haven’t navigated the waters of what Brexit ultimately means, the industrial and logistics sector is best placed of the core property classes to weather any storm.”

Click here or the 'Download' button below the image to view Industrial & Logistics Market Update H1 2016.


Get the latest insight, event invites and commercial properties by email