East London’s warehousing market is set to boom in 2018, according to data from local surveyors Glenny.
The Eastern quadrant of the M25 – including East London, Kent, Hertforshire and Essex – saw a flat-lining logistics market in 2017. But it will surge in the coming year, as pent up demand prompts developers to act.
In 2017 take up across the Eastern M25 industrial market totalled 4.7m sq ft in the first three quarters of the year, with East London and South East London and Kent seeing activity fall below trend. Activity for the year as a whole is expected to reach 6.5m sq ft, some 17 per ce t below trend levels of activity for the region.
Shortages in supply have held back activity despite 900,000 sq ft of new development completing over the past 12 months, say Glenny.
However, demand for new floorspace is said to be growing. Demand for industrial floor space across the Glenny region belies Brexit fears, rising by 26 per cent to 14.9m sq ft in Q2 and Q3 of 2017.
In East London demand bounced back strongly in the spring and summer quarters of 2017, rising by 70 per cent to 8.3m sq ft, with the number of requirements reaching a 10 year peak at 293 enquiries.
John Bell, Managing Partner at Glenny, said: “We expected occupier requirements to ease in Q2 and Q3 of 2017 as Brexit uncertainty kicked in. But the business world appears to be driving through this period and responding with increased demand and record levels of takeup in certain areas.
“However, with supply of industrial stock remaining the primary issue, occupiers are still favouring new space and competition for ‘Grade A’ stock is expected to drive the market forward over the next 12 months. In the absence of ‘Grade A’ space, secondary rents have also benefitted significantly.”