20220803-莱坊-LOGIC_South_West_Q2_2022_5页_1mb

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South West Logistics & Industrial Market Trends Q2 2022 Summary

Despite ongoing supply shortages, occupier demand in the South West industrial market remains very strong, supporting record rental levels. In H1 2022, total occupier take-up reached 2.1 million sq ft, more than double the previous year and significantly ahead of the five-year average. Year-on-year rental growth stands at 9.7%, while the vacancy rate has decreased to 3.6%, highlighting supply tightness. Second-hand units account for the majority of take-up (76%), partly due to a scarcity of larger available spaces. Notable transactions include Graphic Packaging International's 25-year lease on 255,686 sq ft at TITAN (Yate) and ProCook's commitment at St Modwen Park (Gloucester), both in the £6.75 psf range. A major speculative development of 882,000 sq ft is planned for Avonmouth.

Investment activity has shown some slowdown, with H1 2022 investment totaling £312 million, down 24% compared to the previous year. However, overseas investors represented 45% of the total £453 million invested over the preceding 12 months, alongside active participation from UK investors (40%) and other entities. The average weighted yield decreased slightly to 4.9% due to rising demand and constrained supply. Prime rents in the region trend at £8.50 psf. Key investment deals included the £53 million sale of the Tesco Distribution Centre and the Fortitude Industrial Estate.

Overall market outlook indicates strong continued growth, particularly for Plymouth and Exeter, with average rent increases forecast.