The UK Warehousing Market - Aricia Ltd

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Jun 8, 2015 - Warehouse take-up is rising dramatically. 0. 5 ... Source: Property Data/Savills (excludes confidential de
The UK Warehousing Market London Supply Chain Forum, 8th June 2015

savills.com

Savills Industrial & Logistics

 Market Facts

 Kevin Mofid

 Market Trends

 Director, Research

 Market Drivers

[email protected]

 Bespoke Projects

 +44 (0) 203 618 3612

Savills Coverage

Don’t shoot the messenger!

Big shed supply is falling drastically 100 90

80 Million Sq Ft

70 60 50 40

30 20 10 0 Q4 07 Source: Savills

Q4 08

Q4 09

Q4 10

Q4 11

Q4 12

Q4 13

Q4 14

With quality varying across regions C

B

A

A Spec

6

Sq Ft (millions)

5 4 3 2 1 0 East Midlands North West

South East West Midlands Yorkshire & The Humber

South West

Warehouse take-up is rising dramatically Q1

Q2

Q3

Q4

Q1 Average

35

30

Million sq ft

25 20 15

10 5 0 2010

2011

2012

2013

2014

2015

Demand is pushing average size up 290,000 270,000

Sq ft

250,000 230,000 210,000 190,000 170,000 150,000 2005 Source: Savills

2006

2007

2008

2009

2010

2011

2012

2013

2014

Logistics Speculative Development on the rise Sq ft announced

number of units

2.5

12

Sq ft (millions)

8 1.5 6 1 4 0.5

2

0

0 Qtr3 2012

Qtr2

Qtr3

Qtr4

Qtr1

2013

Qtr2

Qtr3

2014 9

Qtr4

Qtr1 2015

Number of units

10

2

Average size of speculative unit Average spec unit size Average deal size (existing units)

Average deal size (all deals) Average deal size (BTS only)

500

450 Sq ft (thousands)

400

350 300

250 200

150 100

50 0 East Midlands Source: Savills

South East

North West

West Midlands

Yorkshire

Supply and demand dynamic is pushing rents 4 3 2

-2 -3 -4 -5 -6 IPD Logistics Rental Growth

Source: Savills/RealFor

Logistics Rental Growth Forecast

2018

2017

2016

2015

2014

2013

2012

2011

2010

2009

2008

2007

2006

2005

2004

2003

2002

-1

2001

0 2000

Rental growth % yr/yr

1

Real Estate as a source of Finance? £4.5 Q1 Q3

Q2 Q4

£4.0

£3.5

£ billion

£3.0

£2.5

£2.0

£1.5

£1.0

£0.5

£0.0 2000

2002

2004

2006

2008

2010

2012

Source: Property Data/Savills (excludes confidential deals)

2014

Conclusions for logisticians  Plan the appropriate search times into your plans….. There is very little space!

 Factor the appropriate rents into your plans…… rents are increasing!  Will there be a desire for logistics owner occupation?  Use the lobbying tools at the industries disposal.

The UK Warehousing Market London Supply Chain Forum, 8th June 2015

savills.com

British Property Federation

Industrial Committee June 2015

Who we are • Trade body for real estate owners and investors

• Around 400 members • Work with Government and other stakeholders to influence policy

• Raise profile of sector • Help members access and understand policy • Promote best practice

June 2015

Role of real estate • Economic infrastructure

• Social infrastructure • National asset with value of over £1,000bn • Employs over 1m people • Contributes over £100bn to economy each year

June 2015

Committee background • Established July 2014

• Born out of BPF Commercial Committee • No equivalent body speaking on unique challenges facing sector

• Growth sector: retail habits changing, manufacturing industry is re-invigorated, HS2/3 • Integrating housing with employment

June 2015

Committee role • Enhance credibility and profile of sector

• Provide market-wide lobby to create a consistent approach to engagement on key policy issues • Improve the outlook for the sector as a whole, unlocking further investment opportunities • Provide a forum for networking and exchange of market and political intelligence

June 2015

Committee membership •

A&J Mucklow



Roxhill Developments



Barton Willmore



Turley



Deloitte



Eversheds



Goodman



Hogan Lovells International



Graftongate



Colliers



Harworth Estates



Delin Capital



Kilbride Holdings



Industrial Agents Society



Legal & General Property



Network Rail



M&G



IDI Gazeley



SEGRO

June 2015

Policy issues • Promoting the value of the sector

• Land allocation • Planning • Sustainability issues • Technology and future-proofing • Building design

June 2015

British Property Federation

Industrial Committee June 2015