Activity across the industrial lettings market in the Eastern M25 region remained slow in 2023 with the final take up figures for the year standing at 4.9m sq ft, a number in line with the previous 12 months but the second successive year of the market running at below trend levels. Activity last year was held back by a slowing in the Big Box market, with only three deals above 100,000 sq ft completing, the largest being the 650,000 sq ft pre let to Tesco at Panattoni Park in Aylesford. 58% of all letting activity in the Glenny region during 2023 was in the sub 50,000 sq ft size bracket.

The first three months of 2024 have got off to a positive start, with 1.3m sq ft of lettings completing and the first Big Box deal having been signed – the 410,000 sq ft letting to multi modal logistics group Ziegler Group at London Gateway. If the remainder of the year continues in a similar vein then we could expect take up to surpass last year’s levels.

Supply has been boosted following the completion of a number of new schemes which have pushed availability to a new peak of 13.4m sq ft across the Glenny region, with 40% (5.1m sq ft) of that space being in grade A stock.

Despite the uptick in supply, the current availability rate of 4.5% remains below the long run rate for the Eastern M25 region (which stands at 5.0%). Occupiers who are looking to upgrade their accommodation are focused on energy efficient buildings and are showing a strong preference for new and grade A space.

The demand for industrial and logistics floor space has continued to ease but at 20.9m sq ft still remains comfortably ahead of supply and 5m sq ft (37%) ahead of pre pandemic levels. The main slowing in demand over the past six months has been in the Big Box sector, which has seen requirements drop back to 8.5m sq ft from 10m sq ft in the latter stages of last year. The demand for medium sized (10,000-50,000 sq ft) and Mid Box (50,000-99,999 sq ft) units remains robust and has strengthened further over the past half year.

Prime rents have stabilised in recent months following the strong post-pandemic growth. Over the past four years prime rents have risen by 57.4% (12.0% per annum) on average across the Eastern M25 market and a period of consolidation is expected over the coming months with current rental growth averaging 2.9% across the region.