Commercial property: Demand for industrial and logistics space continues to grow
18/01/2021
Demand for industrial and logistics space has continued its upward trajectory over the past 12 months, despite the challenges faced by the coronavirus pandemic, according to the latest research.
The research, conducted by global property consultancy firm Knight Frank, indicates that while many sectors of commercial property, particularly those in the retail, hospitality and office sectors, have faced considerable challenges, the changing consumer habits have benefitted other sectors.
With more consumers moving towards online shopping, through necessity at times due to lockdown measures closing physical retail stores, the demand for logistics space has increased significantly.
The first two lockdowns in England have disrupted businesses in a variety of ways that has meant that they have had to pivot and find new solutions, and the impact on commercial landlords in many sectors has been severe.
Landlords in the retail and leisure sector have seen a 28 per cent shortfall in rent due, according to the latest figures, even after 60 days over the last three quarters of 2020.
The extension of the moratorium on tenant evictions has also had an impact, which could mean that some occupiers will not have paid rent for almost 12 months.
However, logistics landlords have seen a significant increase in values because of the acceleration in the growth of the e-commerce sector since the first lockdown was introduced in March 2020.
Andrea Ferranti, Head of Industrials and Logistics Research at Colliers International, said: “At the start of the year we were expecting a material slowdown in rental growth.
“Yet the pandemic has intensified a desire among companies to strengthen their supply chains, which has also been prompted by efforts to present any disruption from new customs checks post-Brexit.”
Experts are now forecasting growth between 1.7 per cent and 2.3 per cent in the logistics and industrial commercial property sectors – the highest in more than four years.
For help and advice on matters relating to commercial property, contact Anne-Maree Dunn at WMT – Chartered Accountants today.