Navigating uncertainty in industrial
& logistics markets
How adaptability and innovation are shaping the future for investors and occupiers
In today’s fast-moving economic landscape, uncertainty is the only constant.
Global and domestic forces are reshaping the playing field for investors and occupiers, with every headline and policy shift sending ripples through the market. Fluctuating interest rates and persistent inflation is significantly impacting confidence levels. High borrowing costs have further slowed speculative development, prompting investors to be more cautious. Yet, even as caution rises, prime rents continue to grow, just at a gentler pace. Landlords are getting creative, offering more generous incentives, especially where supply and demand are out of sync.
Occupier requirements are shifting, with growing focus on strategic needs such as supply chain resilience, automation, ESG compliance, rather than mere expansion. There is a strong demand for Grade A energy efficient, and ESG-compliant distribution space, whilst secondary and less compliant assets face greater challenges and value pressure. Demand is characterised by the surge of transactions from Chinese firms such as JD.com, Supersmart and Top Cloud Logistics, who have taken over 2 million sq ft this year in expansion moves. Supermarkets are making bold moves too, with Waitrose’s 360,000 sq ft letting at Mount Park Bristol, Tesco’s 620,000 sq ft transaction at Aylesford and Marks & Spencer’s 1.3 million sq ft national distribution centre at DIRFT to support their food businesses.
Meanwhile, the defence sector is poised for growth, fuelled by global tensions and political uncertainty. The Strategic Defence Review signals a push for increased investment, with a target of 3.5%.
The development pipeline is experiencing a slowdown, with fewer new projects coming forward due to higher construction costs and political headwinds. This has led to elements of supply constraint in some regions and over supply in others. Vacancy rates have risen due to slower take-up and, especially for older spaces are taking longer to convert into
transactions. And with the Autumn statement from
the
26 November, it is rumoured to bring new wealth taxes and debt measures, uncertainty is set to linger, potentially delaying decision making.
In this climate, adaptability is everything. investors and occupiers who stay informed, embrace innovation, and put ESG at the heart of their strategy will be best placed to thrive. The challenges are real, but so are the opportunities, for those bold enough to seize them.
Fisher German team support Orapi’s strategic move to Wednesbury
Our industrial & logistics agency team has successfully facilitated the move of an industrial supplier in the Black Country which hadn’t relocated for over four decades to continue its growth and safeguard jobs.
We have secured new premises for Orapi Applied Ltd, a world-leading UK manufacturer of specialist chemicals and paint shop consumables, at Britannia Point in Wednesbury. We were appointed to search for state-of-the-art accommodation to replace Orapi’s ageing premises in Smethwick, while incorporating numerous operational needs including significant power supply and to continue the employment of key members of staff.
Read the full article here:
Rachel Reeves on
horizon on
Understanding the valuation trends in UK industrial & logistics market
The UK industrial & logistics real estate sector has experienced significant shifts in recent years, influenced by a range of economic, social, and political factors which are reshaping investor confidence and asset values. The race for logistics space is heating up as businesses double down on supply chain resilience and ride the wave of e-commerce growth, fuelling fierce competition for prime assets and driving yields ever lower.
Modern facilities equipped for automation and last-mile delivery are commanding top-tier prices, while older properties are feeling the squeeze. In crowded urban areas, planning hurdles and scarce land are pushing up the value of existing assets, though
Recent deals done
D12 Charles Babbage House
Search and acquisition of a new north west facility, resulting in the acquisition of a 12,347 sq ft warehouse unit on a 10 year lease for ASEL. Manchester Client: ASEL
unpredictable policy changes keep investors on their toes. Sustainability is no longer optional, ESG considerations like energy efficiency and environmental impact are now crucial in investment decisions and asset valuations.
Rising construction costs and labour shortages are making new developments tougher to deliver, pushing rents higher and limiting supply. Proximity to transport hubs and robust infrastructure remains a critical advantage. Despite economic headwinds, the sector continues to outperform others, boasting low vacancy rates and resilient income streams, even as investors tread more cautiously.
103 Potter Space
Worcestershire
Client: The Potter Group
Acted as joint agent on letting of new build warehouse of 24,880 sq ft resulting in a letting to Amstrong Integrated Limited.
Don’t hesitate to contact a member of the team:
Rob Champion National 0121 426 0891 rob.champion@fishergerman.co.uk
David Newman North 0161 214 4664
david.newman@fishergerman.co.uk
Unit
C2, Fairham Business Park
Identified and agreed a pre-lease of a new 30,000 sq ft industrial facility to Fathomtree, a Nottingham based engineering business. Nottingham Client: Clowes Developments
Laura Sutton London & South East 020 7747 3139 laura.sutton@fishergerman.co.uk
Richard Tomlinson Midlands 01905 728432
richard.tomlinson@fishergerman.co.uk