- Considered overall, 2015 was a sound year for the industrial and logistics occupier market, albeit fortunes were mixed across sectors and regions. UK-wide take up fell 7% short of 2014’s record annual total, but was nevertheless 2% ahead of the five-year annual average.
- Sector-wise, mid box was 2015’s clear standout performer with record annual take-up and activity rising markedly on 2014’s level.
- A wave of speculative development prompted the first annual increase in UK-wide grade A availability since 2009. Despite the turnaround, grade A supply was only restored to its 2013 level, and is less than half its peak in 2009. It also did little to address the overall pressure on supply, with total UK availability falling 18% during 2015 to a new record low.
- Rental growth continued its strong run throughout 2015, and was familiar to many parts of the UK. Across 60 UK markets, prime headline rents increased 3.9% in 2015, moderating slightly from 2014’s level. Regionally, the East saw the strongest average increase, rising 6.2%, although Liverpool saw the largest increase of any single location, with prime rents rising 16.7%.
- Notably, secondary rental growth during 2015 outpaced prime for a third consecutive year, with the discount to prime reducing from a peak of 25% in 2012 to only 17% at the end of 2015. As this growth has rippled out across the country, London underperformed the UK average, while the North West markets saw average growth soar to 13%, having hitherto seen limited movement.
- 2015 ranked as one of the strongest ever years for investment into industrial and logistics assets. Although volume was 15% short of 2014’s record annual total, the number of transactions actually increased marginally year-on-year, reflecting ongoing depth of demand.
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