Prime Logistics: Q3 2023

MOST UK LOGISTICS MARKET INDICATORS RETURN TO PRE-PANDEMIC TREND

Occupier take-up increased by 12% in Q3, the first quarter-on-quarter rise in a year. Manufacturing occupiers, notably those in the construction and housebuilding sector accounted for roughly half of all activity, going someway to fill the post-pandemic gap left by internet retailers. On a rolling annual basis, occupier demand is now back to the pre-pandemic trend, though business plans continue to be hampered by a challenging economic backdrop.

Headline prime rents increased further in Q3, broadly in line with inflation. Availability also edged-up, largely due to the completion of new speculative buildings. Availability nevertheless remains below the pre-pandemic rate. Speculative development starts slowed further in Q3, which continues to support headline rents.