Quarterly industrial figures are volatile as Brexit uncertainty continues

Stalled boardroom decision-making as a result of Brexit uncertainty has impacted industrial take-up for the first quarter of 2019, resulting in the lowest Q1 take up since 2013.  

However, according to global real estate advisor Colliers International, this is just a temporary roadblock for the sector, with experts predicting that pent-up demand will produce a bumper year for take-up in 2020. 

According to the Spring 2019 Industrial & Logistics Barometer, national ‘Big Box’ take-up (100,000+ sq ft) slowed to 4.9 million sq ft in Q1 2019.  

In addition, there has also been a lack of mega-deals, with only two deals of 500,000+ sq ft occurring between January and March 2019.  

Tom Watkins, Associate Director in the Industrial & Logistics team at Colliers International in the South West and Wales, says that recent speculative development at Central Approach, Avonmouth, and Bridgwater Gateway, is evidence that developers are confident the market will kick back into life once Brexit has been resolved. 

“Industrial and logistics has been the undisputed standout performer over the last 12 to 18 months, successfully managing to navigate the unchartered waters of Brexit following the referendum in 2016,” he said.  

“Despite a slow start to 2019, we believe that the fundamentals driving the market remain unchanged. Although the market is experiencing a slow patch, Colliers are expecting this to only last as long as the immediate uncertainty.  

“There is pent-up demand for distribution space in the South West, and once occupiers are more comfortable with the status of the economy, they will want to move quickly to secure premises. The major speculative developments that are currently proposed at Central Approach and Bridgwater Gateway will be well placed to accommodate this demand. 

“Over the 12-month period to the end of March 2019, the retail sector accounted for 56 per cent share of total take-up as the change in consumer behaviour remains the key market driver.”    

Speaking in Bristol recently, Walter Boettcher, director of research and forecasting at Colliers International, predicted that an end to the Brexit impasse would “open the floodgates” to a spending spree among businesses of all types in the South West.  

Andrea Ferranti, Head of Industrial & Logistics Research at Colliers International, added: “We are confident that, once occupier confidence returns and investment decisions are implemented by those retailers executing their online strategy, pent-up demand will produce a bumper year for take-up in 2020.” 

The Colliers research finds that 2019’s scheduled completions will total circa 10.8 million sq ft nationally, up 55 per cent on the total space completed in 2018.   

Len Rosso, Head of UK Industrial & Logistics at Colliers International, said: “Looking ahead, requirements by occupiers to bolster operational efficiency and reap the benefits of growing e-commerce demand will support the market this year. We fully expect this to translate into steady take-up in 2019, in line with the 10-year average, and a stand-out year in 2020.”

Related Experts

Tom Watkins

Associate Director

Bristol

I joined Colliers International in 2012 for a years placement as part of my degree at Bristol UWE.  Since completing my degree I re-joined the Bristol office in 2014, and qualified as a Chartered Surveyor the following year. I am now Head of the Industrial & Logistics team in Bristol, specialising in the disposal and acquisition of industrial premises in the South West and South Wales regions, and specialising in industrial development.

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Andrea Ferranti

Senior Analyst, Head of Industrial & Logistics Research

London - West End

Head of Industrial & Logistics Research working closely with the Research & Forecasting team whilst supporting the Industrial and Logistics teams nationally in providing research and advises to clients. Andrea leads on the division’s key research papers which include, but not limited to, the Industrial & Logistics Barometer and the UK Speculative Development Map – both of which have become key benchmark publications highly valued by UK investors and developers alike.

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Len Rosso

Head of Industrial and Logistics

London - West End

Len has more than 30 years' experience in the commercial property sector. Having started out as a trainee surveyor in 1983 he moved on to set up Jansons in 1990, a niche agency specialising in industrial in North and West London. In 2004/5 the business was voted Industrial Agency of the Year, this being the first ever non West End national practice to have won this prestigious award. In that same year the business transacted in excess of 3.5 million sq ft which accounted for in excess of 50% of the total transactions for the North and West London market.


Since joining Colliers International, as the Head of the UK Logistics and Industrial Department, the objectives are the same as always, to outperform all competitors whilst providing the highest level of service to all our clients. In 2018, the Colliers International UK Industrial & Logistics team completed over 250 deals totalling over 15 million sq ft. 

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