JLL’s Western Corridor Industrial Market report revealed that during 2018, approximately 5.61 million sq ft of industrial floorspace was taken-up across the Corridor with around 3.3 million sq ft transacted in West London and the remaining 2.3 million sq ft taken up in the Thames Valley. Take-up in 2018 broadly matched the robust activity highlighted in 2017, when 5.65 million sq ft was transacted, and demand for industrial floorspace across the Corridor has been particularly strong over the last three years where on average 5.6 million sq ft was taken up in each year, boosting the five-year average level of take-up.
Commenting on JLL’s findings, Sarah Downes, director JLL industrial and logistics said: “During 2018, we have seen strong levels of take-up recorded, effectively matching the last couple of years and highlighting resilient occupier activity along the Corridor. Supply fell 13% over the course of 2018, with 6.87 million sq ft of industrial floorspace available at the end of 2018. The sharpest drop in supply was felt in West London, with the Thames Valley remaining relatively unchanged. With demand on the rise, the focus this year is on driving value on existing stock and identifying new development opportunities.”
JLL cited that the high levels of demand along the Corridor, despite economic and political headwinds, demonstrates the importance of West London and the Thames Valley’s industrial markets. This demand was driven by a high level of churn, robust requirements for cargo and servicing the Heathrow area, growing expectations of last-mile delivery, the rapid growth of London as a capital that needs servicing, and the influence of the wider South East market. Given the fall in supply across the Western Corridor over the last 12 months, it is suggested that some locations now have all-time low vacancy rates.
Prohad Khan, industrial research analyst, JLL, added: “Robust demand for industrial floorspace over the last three years has been driven by the smaller end of the market, with the average size of unit taken up in 2018 totaling 12,707 sq ft, slightly up on 2017 when the average size of unit taken up was 12,695 sq ft. Although we predicted that economic and political uncertainty could slow down occupier decision making, the impact on take-up has been minimal and we have once again seen figures exceeding 5 million sq ft in 2018. The year ahead will see growing uncertainty and a shortage in supply, but overall sentiment remains positive.”
According to JLL’s Western Corridor Industrial Market report, at the end of 2018, take-up was 1% higher in West London but 3% lower in the Thames Valley compared with 2017. Looking at the long-term average, take-up in 2018 was 23% higher than the 15-year average (2004-2018) of 4.6 million sq ft.
JLL’s Industrial & Logistics Heathrow/West London team now comprises an active team of 8 agents with a combined experience of over 80 years in Heathrow / West London market, transacting over 2.1 million sq ft last year, over 40% of total deals done across the corridor.