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Our View

Prime industrial rents have remained broadly stable over the past six months following an easing in demand and an increase in supply as a number of new schemes came to the market. Since the start of the pandemic rents have moved ahead sharply, rising by 65.5% on average, with the most significant increases being seen in the inner M25 markets. The strongest growth has been been experienced in East London, where values in Canning Town over the past four years are up by 75.7%. Outer M25 markets have seen values increase by 46.0% on average, with the strongest market being Chelmsford, where prime rents have increased by 53.8%. In terms of rental growth we expect the outlying M25 locations to out-perform inner M25 locations during 2024.

Industrial Market Rents
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Industrial Rents and Capital Values

The growth in prime rents came to a virtual standstill in the six months to the end of Q1 2024 as the pressures of a slowing economy and higher costs of finance weighed heavily on the sector. Across the 16 locations in the Glenny Rents Survey 13 saw rents remain stable with two locations continuing to see rents edge higher and one location recording a fall.

The demand for industrial floor space has eased in most of the Glenny sub regions over the past six months, with the exception of Essex, where requirements moved to a new high. The most significant slowing in demand has been in the Big Box sector, where occupiers have reined in requirements.

Owner occupier capital values continued to slip and are now down by 10.1% over the past 12 months. The most significant falls have been in the inner M25 locations, where values are down by 13.2% on average, whilst outer M25 locations have seen values slip by 4.8%.

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John Bell

John Bell

Equity & Managing Partner, Head of Commercial Agency
020 3141 3500
[email protected]