The Eastern M25 industrial market saw improved take up performance in 2024 with activity rising by 10% and the first few months of this year showing a strengthening picture in selected markets. Last year saw total market activity reach 5.4m sq ft, with a relatively even spread across the year. The stand out performance was registered in the Essex market, which recorded above trend activity of just over 2m sq ft, driven by a strong performance from the Big Box sector, whilst South East London & Kent also saw activity surpass 2m sq ft over the year.

Big Box take up across The Glenny region registered 1.1m sq ft of activity across six deals, with lettings focused on grade A accommodation in the Essex and South East London & Kent markets. Mid Box lettings, which totalled 752,550 sq ft in 13 transactions, was also focused primarily on grade A accommodation, with most regions seeing good levels of activity. Both of these sectors accounted for 35% of the year’s total turnover.

This improving performance has been supported by continued demand from occupiers, with total requirements standing at 20.2m sq ft with the demand for Big Box units accounting for 51% (10.3m sq ft) of overall demand. Mid Box requirements are at their highest total since 2022 standing at 3.3m sq ft. The demand for units below 50,000 sq ft has weakened slightly and now accounts for 33% of overall demand but this still represents an encouraging 6.6m sq ft.

Supply has continued to edge higher, with the availability rate moving up to 6.6%, a level last seen in 2013. The major difference this time is the healthy supply of grade A space that is on the market which stands at 7.2m sq ft, following the latest round of development completions. New or refurbished Big Box units account for 45% (3.2m sq ft) of the overall grade A supply, with another 22% (1.6m sq ft) in Mid Box units; with more stringent rules to be introduced regarding energy efficiency these buildings are likely to be met with good demand when activity recovers further.

It is fair to say that the demand for grade A accommodation has continued to strengthen, with more than 50% of all letting activity focused on grade A space over the past 12-15 months as occupiers look to improve their sustainability footprint. This is particularly evident in larger lettings where energy efficiency is key to the operation of the business.