2017 – 2016 recorded the second highest level of logistics take-up in the past 10 years, according to JLL’s new research, with the take-up of new space posting an all-time high.
Commenting on the research, Richard Evans, Head of JLL’s National Logistics team, said: “Approximately 23.9m sq ft of Grade A logistics floorspace was taken-up over 2016, an increase of 38% on the previous year and the second highest year on record*; 19.9m sq ft of this total was in new buildings the highest annual level according to JLL’s records which date back 21 years. The retail sector provided the most active source of demand in 2016 accounting for a 58% share of total Grade A demand.”
JLL’s research also highlights that at the end of 2016 there was 12.4 million sq ft of Grade A floorspace available nationally, 17% lower than at the end of 2015. Approximately 7.7 million sq ft of this total comprised new floorspace with 4.8 million sq ft of good quality second hand floorspace. The new floorspace available at the end of 2016 included approximately 2.5 million sq ft speculatively under construction. At the end of 2016 the vacancy rate for modern logistics stock was just 5%.
Jon Sleeman, Director Industrial & Logistics Research at JLL, concluded: “We are tracking a large number of active requirements for big box space and, therefore, expect continuing robust demand this year, although at a somewhat lower level than 2016 due to a slowdown in the UK economy. With speculative development remaining modest, vacancy rates will remain low in many markets, supporting some further rental growth.”