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Property market defies Brexit fears

Property market defies Brexit fears

The logistics property has shrugged off fears of a Brexit slump, recording 7m sq ft of big box transactions in the third quarter of 2016.

The figure – in line with medium-term trends – has come as speculative development adds 17% extra grade A floorspace so far this year.

Development has been particularly strong in the South East, Midlands and North West.

In the key East Midlands market, third-quarter deals to Amazon, Ted Baker and John Lewis totalling 1.7 million sq ft meant take-up still fell below the five-year average – and hopes are pinned on a busy final quarter. In the region, availability has risen by 23% in 2016 due to new completions and stock returning to the market. In particular, grade A availability increased by 58% to around 5 million sq ft, its highest level since 2009.

David Binks, Partner, Industrial & Logistics at Cushman & Wakefield, commented: “Despite the slowdown both before and after the referendum, there have been a number of strong transactions, and in particular at Magna Park, Lutterworth with Wayfair acquiring 258,000 sq ft, and CML taking 105,000 sq ft in second-hand refurbished buildings.

“Grade A availability has increased significantly following the completions of two speculative buildings at Optimus Point as well as two more speculative buildings on Interlink Business Park, one of which has now been let. Demand for new space remains strong and Q4 has already seen a number of significant deals, notably Amazon has continued their acquisition programme of space by agreeing to take 297,000 sq ft Grade A speculative unit at Daventry Distribution Centre.”

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