2025-02-10-莱坊-UK_Logistics_Market_Dashboard_January_2025_4页_969kb

Investment Market Summary

Core Content

The document provides an overview of the UK industrial and logistics investment market, occupier activity, rental growth, and development trends as of Q4 2024. It also includes insights into the broader industry and trade context, particularly the manufacturing sector and online retail sales.

Investment Activity

• Q4 2024 Investment Total: £2.53 billion, up from £1.11 billion in Q4 2023, contributing to an annual total of £8.4 billion, a rise from £6.5 billion in 2023.
• Investment Drivers: Robust activity in the second half of 2024 boosted the annual total, despite a weak start.
• Capital Composition:
  • Private capital increased its share from 7% in 2021 to 17% in 2024.
  • Overseas and institutional investors' share decreased from 62% in 2021 to 51% in 2024.
• Notable Transactions:
  • Valor and QuadReal acquired a Purfleet distribution centre for £130 million, leased to Tesco.
  • Blackstone purchased a portfolio of 18 last-mile logistics units near Manchester, Birmingham, Reading, and Leeds for £200 million from PGIM.

Returns

• Industrial Total Returns (Annualized):
  • Q4 2024: 8.4%
  • 2025 Forecast: 10.8%
  • 2026 Forecast: 9.0%
  • 2027 Forecast: 8.0%
  • 2028 Forecast: 6.9%
  • 2025–2028 CAGR: 8.7%
• Office Total Returns:
  • Q4 2024: -0.1%
  • 2025 Forecast: 7.8%
  • 2025–2028 CAGR: 7.9%
• Retail Total Returns:
  • Q4 2024: 8.6%
  • 2025 Forecast: 10.1%
  • 2025–2028 CAGR: 8.4%
• Other Total Returns:
  • Q4 2024: 5.5%
  • 2025 Forecast: 8.4%
  • 2025–2028 CAGR: 8.1%
• All Property Total Returns:
  • Q4 2024: 5.8%
  • 2025 Forecast: 9.7%
  • 2025–2028 CAGR: 8.4%

Occupier Market Activity

• Occupier Take Up (Q4 2024): 8.0 million sq ft, similar to Q4 2023.
• Annual Take Up (2024): 35.7 million sq ft, up from 30 million in 2023, slightly above the pre-pandemic long-term average.
• Vacancy Rate (Q4 2024): 7.3%, up from 7.2% in Q3 2024, but stabilising overall.
• Notable Transaction: CTDI leased 184,000 sq ft at Indurent Park Wellingborough, a BREEAM 'Excellent' rated unit.

Rental Growth

• Annual Rental Growth (Year to December 2024): 5.5%, a slight deceleration from November.
• Monthly Rental Growth (December 2024): 0.60%, up from 0.48% in November.
• 2025 Rental Growth Forecast: Revised up to 4.0% (compared to 3.7% in Q3).
• Regional Forecasts:
  • South East: 4.6%
  • North West: 4.5%
  • London: Expected to see the strongest rental growth over the next four years.

Development Trends

• 2024 Development Completions: ~20 million sq ft, including available space and space already committed.
• 2025 Development Pipeline: ~24 million sq ft under construction, indicating an increase in new supply.
• Supply Constraints: Despite high vacancy rates, supply constraints remain, especially for high-quality units, which is driving development activity.

Industry & Trade Insights

• Manufacturing PMI Index (January 2025): 48.3, up from December's 47.0, but still in contraction (below 50).
• New Orders: Continued decline, with a fourth consecutive month of contraction.
• Employment: Fell for the third month in a row, with job losses accelerating.
• Supply Chain Pressure: Increased lead times indicate ongoing supply chain pressures.
• Purchase Price Inflation: Reached a two-year high, with input and output costs rising.
• Business Sentiment: Among the weakest recorded in the past two years.
• Online Retail Sales:
  • UK Internet Retail Sales (December 2024): £3.28 billion, second highest monthly total on record.
  • Online Retail Penetration Rate (December 2024): 29.3%, up from 28.1% in December 2023 and 27.1% in December 2022.
  • Online Grocery Penetration Rate (December 2024): 9.5%, up from 9.3% in December 2023, showing resilience post-pandemic.

Key Contacts

• Claire Williams: Head of UK & Europe Industrial Research
  • Email: Claire.Williams@knightfrank.com
  • Phone: +442038970036 +44207861519
• Johnny Hawkins: Head of Logistics & Industrial
  • Email: Johnny.Hawkins@knightfrank.com
  • Phone: +442078611519
• Will Gubb: Head of Industrial & Logistics Capital Markets
  • Email: Will.Gubb@knightfrank.com
  • Phone: +442078611595
• Charles Binks: Partner, Head of Industrial & Logistics Agency
  • Email: Charles.Binks@knightfrank.com
  • Phone: +442078611146

Important Notice

• This report is for general information only and not to be relied upon.
• Knight Frank LLP cannot be held responsible for any loss or damage resulting from its use.
• The views expressed do not necessarily reflect those of Knight Frank LLP.
• Reproduction of this report is not allowed without prior written approval.