In the past 12 months, the industrial market has remained resolute and thrived at a time when many other sectors of the economy have struggled.
Glenny’s Q4 2020 Databook update shows that take up moved ahead of the long run average in the Eastern M25 region for the first time in three years, with activity reaching 7.3m sq ft.
“The first signs of the pandemic introduced a significant amount of uncertainty for us and our clients, but the onset of the first lockdown has changed consumer behaviour, perhaps forever,” says John Bell, Managing Partner and Head of Business Space Agency at Glenny. “A lot of retailers were forced into looking for additional logistics space to respond to these changes and supply chains have had to respond to the ‘new norm’, some of which has brought about greater efficiencies.”
The Eastern M25 has certainly seen a change in the business environment and whilst there has been an increase in supply over the past 12 months, this has provided greater choice for occupiers looking to adapt and enhance their supply chains.
Bell adds: “Big Box supply in our region has doubled over the past year, albeit from a very low base. At the end of 2020 there was 1.7m sq ft ready to occupy space available, but last year was also a record year for lettings in the sector. Over the course of the year, there were 11 Big Box lettings in our area, totalling some 4.2m sq ft. The whole nature of our market has changed.”
This is not to say that lettings in the rest of the sector have disappointed, and if the latest demand figures are anything to go by, will continue to strengthen during 2021.
Bell concludes, “Not only is the business environment dealing with the pandemic, but it is now reflecting on the changes brought about by the new EU trade deal. The first few months of the year may be quieter as businesses come to terms with the new rules, but I expect an improving outlook thereafter.”
The Eastern M25 office sector has continued to struggle over the past 12 months, with take up ending the year at just under 1m sq ft, 65% down on the 10 year average for the region. All of the sub markets across the region saw reduced activity levels, including Docklands where activity was down to 412,300 sq ft.