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Logistics real estate outperforms retail, residential and office says JLL

Logistics real estate outperforms retail, residential and office says JLL

This morning’s property update – Beyond Brexit – from real estate firm JLL, painted a positive picture for the logistics property market which outperformed retail, residential and office space in 2018 achieving a 20% return. Kirsty Adams reports.

JLL’s Jon Neale, head of UK Research, cited in this morning’s opening speech at London's Rosewood Hotel that despite political chaos, the UK economy is performing well but has a fragile retail high street.

Further flexibility across property models is expected and was highlighted by Patrick Nelson, head of European real estate at WeWork (collaborative workspace company), which is pioneering a new type of office environment.

This morning’s speakers projected that we will see collaborative workspaces for logistics operations too including; multi-use warehousing, more consolidation, click and collect firmly in the mix and retail stores becoming display spaces. Phil Redding, chief investment officer at SEGRO, says that logistics property will continue to outperform other sectors, but not reach the highs of 2017 of 20%.

It was also cited that infrastructure schemes -  like Heathrow, HS2 etc - may not be built, because there’s no-one to build them due to a reduction of entrants to the UK since Brexit.

There was no escaping the fact that a lack of logistics space availablecontinues to present a major challenge to the logistics industry as customer demand continues.

Finally, amid continued political uncertainty, 2018 will be the year in which many companies finally make decisions about their business strategies post-Brexit, according to JLL. Nevertheless, GDP growth looks set to be around 1.5% in 2018, roughly in line with 2017 and well ahead of some of the more pessimistic forecasts produced at the time of the referendum.

To read JLL UK’s property predictions 2018 report, click here.

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