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Sources Of Demand Evolving As UK Logistics & Industrial Take Up Reverts Towards Medium Term Average

Lauren Joselyn • 11/04/2023
  • 8.6 million sq ft of UK logistics & industrial space taken up in first quarter of 2023 
  • This was the lowest since Q1 2020 but is above the 10-year pre-pandemic average of 8.3 million sq ft 
  • Third-party logistics providers and manufacturing prove key pillars of demand as e-commerce segment drops back 

London, 12 April 2023 – Logistics and industrial occupiers leased and acquired 8.6 million sq ft of space in the UK during the first quarter of 2023, according to real estate services firm Cushman & Wakefield.  

While this represents the lowest quarterly volume recorded since Q1 2020 it is above the 10-year pre-pandemic Q1 average of 8.3m sq ft seen across 2010-2019.  

Take-up volumes are reverting towards their medium-term average following the rapid and necessary expansion driven by e-commerce operators and post and parcel businesses during the pandemic when this segment accounted for as much as 40% of quarterly take-up, as opposed to less than 10% in Q1 2023.  

Third-party logistics providers remain acquisitive and accounted for 2.6m sq ft (30%) of the quarter’s take-up, with manufacturing continuing its reassertion as a key pillar of demand in the UK market with 1.4m sq ft (16%). 

Occupier demand is evolving in other ways too. The first quarter saw 62 transactions recorded, an increase on the 57 during Q4 2022, although the lot size has been smaller on average than in 2022. Units over 200,000 sq ft accounted for 38% of total take-up in Q1 whereas it accounted for more than 55% of total take-up across 2022. 

Demand remains strong for high quality space within best-in-class locations, with the first quarter again confirming the popularity of the logistics Golden Triangle. The West Midlands accounted for the most space taken nationally during the quarter and the North West also remained popular.  

David Binks, International Partner in Cushman & Wakefield’s UK Logistics & Industrial team, said: “Given the current economic trading conditions and challenges facing occupiers, the market has continued to demonstrate its resilience with demand still above the pre-pandemic average. Some occupiers are looking to enhance and intensify their use of existing assets but overall demand for well connected, automated, and carbon neutral facilities is likely to remain firm.  

“Manufacturing will be an interesting area to watch in the UK. We are getting more enquiries from manufacturers and production businesses. These projects are often significant and can take a long time to materialise into the construction of physical assets, compared with the more reactionary logistics market, but it is an indicator of what we might be seeing on the ground in two to three years’ time.”  

As take-up has slowed but new space continues to be delivered, availability is also reverting closer to historical levels. Total space available for occupation as units of more than 50,000 sq ft now exceeds 60 million sq ft. Despite a shift in market dynamics, this level still represents constrained supply with availability now equivalent to 1.29 years of take-up, firmly below the 10-year average of 1.6 years. Developers continue to start construction on new schemes, with 21 million sq ft of space currently under construction and due to complete over the next 18 months. 

Following significant increases during 2022, rental growth has begun to moderate. Rent levels have largely remained stable over the first three months of 2023, with some pockets of growth being observed across the market. Meanwhile in the investment market, yields, too, largely stabilised during Q1, with some minor yield compression observed in secondary and peripheral locations hit hardest by the economic shocks during the second half of 2022  

Ed Cornwell, International Partner in Cushman & Wakefield’s UK Logistics & Industrial Capital Markets team, said: “The sector’s rapid repricing has begun to attract investors back to the market, resulting in a cautious improvement in sentiment. Although the risk of another economic shock remains firmly on the radar for all market participants, changes to investment strategy and risk appetite are beginning to bed in as investors adjust.”

About Cushman & Wakefield
Cushman & Wakefield (NYSE: CWK) is a leading global commercial real estate services firm for property owners and occupiers with approximately 52,000 employees in approximately 400 offices and 60 countries. In 2022, the firm reported revenue of $10.1 billion across its core services of property, facilities and project management, leasing, capital markets, and valuation and other services. It also receives numerous industry and business accolades for its award-winning culture and commitment to Diversity, Equity and Inclusion (DEI), Environmental, Social and Governance (ESG) and more. For additional information, visit


Lauren Joselyn Cushman & Wakefield
Lauren Joselyn

Associate Director, EMEA Communications • London

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