A half yearly review of occupier and investment activity in the UK big shed market.
- Occupier demand for big sheds in the UK achieved record levels during 2018. Take-up amounted to 31.9 million sq ft, 28% up on the five year average of 24.9 million sq ft.
- As online retail sales peaked at 21% of all retail sales, big shed deals for e-commerce occupiers contributed to 28% of all take-up. Third party logistics companies accounted for a similar amount of take-up, with many serving online retail contracts.
- The strength of demand means supply levels have remained relatively constrained. Current availability of modern big sheds amounts to 25.8 million sq ft, just over a years’ supply based on the five year average take-up rate.
- The supply / demand dynamic continues to put pressure on rental values. Average net effective prime rents for the 13 locations we monitor have increased by 5.4% over the past 12 months.
- Distribution investment volumes reached £4bn during 2018 in line with the five year average.