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10 / April / 2017

Market Insights - Industrial Sector Outlook 2017

The industrial sector was largely undisturbed by the referendum result and enjoyed another strong year of performance.

A key driver of performance was the imbalance in demand and supply. In total, c. 20m sqft of new space entered the market in 2016 (the majority being logistics space), however this was not sufficient to satisfy the rise in demand. The slight slowdown in take up immediately after the referendum was fully recovered in the subsequent quarter, which resulted in an increase in total take up from 35.6m sqft in 2015 to 37.9m sqft by the end of 2016. Most of this demand was driven by retailers expanding their online platforms. The fall in sterling was also perceived to be a positive factor which helped stimulate activity in the UK manufacturing sector. As a result, the sector delivered positive rental growth for the year.