UK warehouse rents are rising sharply as a summer supply shortage forces occupiers to pay top prices.
Two deals agreed this week show significant rental uplifts.
Warehouse REIT, the AIM-listed specialist warehouse investor, has agreed a 10-year lease renewal with the distribution arm of Walgreens Boots Alliance for 113,000 sq ft at Basingstoke’s Daneshill Industrial Estate in Basingstoke.
The 10-year lease renewal, with no breaks, in return for market standard incentives, has been agreed at a 42% uplift to the previous rent paid, with a headline rent of £925,000 per annum, or £8.19 psf. The agreement reflects the strong demand for high quality warehouse facilities, and the shortage of alternatives, in this key distribution location as well as the importance of the unit to the tenant’s supply chain.
In a separate deal M7 Real Estate. the pan-European investor and asset manager, announces that it has completed five new lettings totalling 50,500 sq ft at the Air Cargo Centre in Castle Donnington.
Recent lettings to DHL, HGV Direct and Norsk, have resulted in a new record rent for the property of £7.95 per sq ft, an increase of just under 20% on the previous average passing rent of £6.50 per sq ft.