Research article

National investment in the industrial & logistics market

Investor demand keeps volumes strong

The current geopolitical climate and continued uncertainly around Brexit has had a clear impact on investment into all commercial sectors with overall investment volumes currently down 43% compared to the first half of 2018.

There have been lower investment volumes in Q2 driven by continued political uncertainty yet pricing remains stable

Tom Scott, Director , Business Space Investment

It is therefore encouraging that investment volumes for distribution warehouses have reached £1.51bn for H1 2019, 5% higher than the corresponding time in 2018 however the multi-let subsector saw significantly lower volumes than H1 2018.

A slight rise in investment volumes in 2019

Investment volumes slight rise in 2019
Source: Savills Research

UPS Kentish Town where UPS have bought the freehold for a 2% NIY

UPS Kentish Town where UPS have bought the freehold for a 2% NIY/strong>

While the portfolio market has been quieter than usual, volumes were clearly helped by the £250m sales of DB Symmetry to Tritax in the first quarter.

Savills prime yields have remained largely static for the last 12 months and now stand at 4.25% for prime single let logistics units and 4.00% for multi-let industrial estates, the lowest level ever seen.

Prime investment yields remain static

Prime investment yields remain static
Source: Savills Research

As we move through 2019, we expect that continued Brexit uncertainty will see some investors continue to pause for thought, while others become more active as they continue to rebalance away from retail and into industrials.

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