Agents and landlords can be forgiven at the moment for being slightly wary over what 2025 holds for the market, however there are many opportunities out there and reasons to be more positive about the year ahead.
The industrial and logistics market in our region has probably got the highest supply of larger logistics warehouses available that we have seen in recent history. Combine that with the continued economic uncertainty that we are currently experiencing and extremely slow occupier decision making and you can forgive people for looking nervously at what might be install this year.
However with increased supply comes increased opportunity. Since Covid – warehouse and logistics supply has been so tight that occupiers were struggling to find the building they were actually looking for, often meaning they stayed put. Wider options for tenants and investment by landlords in their buildings, should mean that the quality of stock on the market will increase if there is a little more competition.
Recent Savills research data is also suggesting that the demand is there. Their requirements index shows an 11.3% rise in nationwide requirements in the fourth quarter of 2024, with requirements of 100,000–200,000 sq ft nationwide a notable part of this. Based on previous years – this requirement index is suggesting the first half of 2025 should see take-up in the order of 16–18m sq ft nationally, which would actually show an improvement on the last 2 years.
Savills research data is also projecting a continued rental growth of 3.5% per annum, which exceeds the pre-Covid ten year average of 2.6%.
All of this is a reason to be more positive about the year ahead. More opportunity will hopefully lead to increased quality of stock which in turn we hope leads to more occupiers reviewing their existing facilities and business requirements.
At the smaller end of the industrial market – stock remains extremely tight in the smaller and mid box kit. The mid box market has been extremely active in our region over the last couple of years – as evidenced in another of our recent articles. https://drakeandpartners.co.uk/midbox-market-proving-popular/
2025 is likely to involve as much hard work as 2024 but there is plenty to get your teeth into, plenty of opportunity and strategic advise to provide to our clients and contacts.
We look forward to working with you and contributing towards another successful year.