A RECORD YEAR FOR INDUSTRIAL AND LOGISTICS INVESTMENT VOLUMES…

The year 2018 delivered a record for industrial and logistics investment volumes, according to Lambert Smith Hampton’s 2019 Industrial & Logistics Market report.

A total of £8.4 billion of assets changed hands and the sector outperformed the rest of the commercial real estate market.

Take-up of warehouse space above 100,000 sq ft fell just short of 2016’s record high.

But it was a different picture at the smaller end of the market. Despite an increase in supply, take up of 50,000 sq ft to 99,999 sq ft space was the worst in nine years after a record year in 2017.

Lambert Smith Hampton expected 11.7 million sq ft of speculative development to come forward in 2019 but reported that the critical lack of supply of quality medium-sized and small properties will continue, despite robust levels of demand.

Strong overall results also hide a striking difference in performance between UK regions. Take-up in the East Midlands hit a record 14.6 million sq ft and big box logistics take-up increased 93 per cent. But take-up in the West Midlands hit a six-year low due to a lack of large logistics deals.

Looking ahead, investors seeking to drive performance will now be banking on rental growth alone, as rising land values and record low yields mean that the era of yield compression has largely come to an end. However, with favourable rental growth prospects in relation to other property sectors, UK industrial and logistics is still forecast to outperform the wider market across the next five years.

… but logistics companies not so confident

Almost 60 per cent of logistics companies say trading has got tougher in the past year, according to Barclays and accountants BDO in a report published this summer. Close to 15 per cent said market conditions are much more difficult – the highest such result since the second half of 2012.

The report, prepared in conjunction with research agency Analytiqa, also revealed that despite tough market conditions, more than the 100+ survey respondents (all senior decision-makers in the sector), said they still expect to increase profits over the next 12 months.

A weak outlook for UK economic growth, Brexit, and the downturn in the global economy have resulted in nearly half the operators committing to lower levels of investment — but not in technology and sustainability where three quarters of logistics operators say they are likely to make significant capital investment in the next 12 months.

More than two thirds of businesses taking part in the survey say they will be investing in sustainable, environmental or green projects in the next 12 months. There are pragmatic reasons for this as operators anticipate the commercial benefits of cutting fuel usage to secure continued access to the increasing number of UK cities introducing clean air zones.

Fraiken extends long-standing fleet management contract with NHS Blood and Transport

Coventry-based Fraikin has sealed a threeyear renewal deal for one of its longestrunning fleet management contracts.

The company, which provides commercial vehicle contract hire and fleet management, will continue to manage 350 NHS blood and transplant vehicles, including emergency response cars and the refrigerated trucks which collect and transport blood and blood-related products nationwide.

Tom Hammond, National Fleet Services Manager at NHS Blood and Transplant, said: “The national reach of Fraikin’s mobile technician network ensures any unexpected issues we encounter are handled effectively.”

NHS Blood and Transplant requires a minimum 98 per cent vehicle availability, a 100 per cent MOT pass rate and a first-fix rate for any breakdowns of 99 per cent – all of which Fraikin achieves. The maintenance schedule is managed by the team at Fraikin’s headquarters in Coventry.

NHS Blood and Transplant is the nondepartmental public body of England’s Department of Health and Social Care. Just 830,000 people gave blood last year, but more than 200,000 new donors are needed annually to replace those who can no longer donate regularly.