According to research from real estate adviser Bidwells, take-up for industrial and logistics real estate in Norfolk, Cambridge, Suffolk and M1 South all increased in H1 2024 compared to H1 2023.
Bidwells notes that ‘the improved buoyancy across the locations is coming forward for market-specific reasons in each geography’.
By the half-year mark, Bidwells says that the Cambridge market ‘saw take-up reach 159,000ft², almost 80% of the total lettings for 2023 as a whole’ and credits the region’s ‘growing science and technology occupiers’ as ‘a core driver of this activity, with half of the floorspace taken by companies operating across these sectors’.
In Norfolk and Suffolk, it notes that ‘take-up of 321,400ft² in H1 2024 is already ahead of the total achieved in 2023 as a whole and is likely to exceed the 10-year average’. It attributes this total in part to ‘one key letting’ but explains that ‘there was a wide range of floorspace taken during the first six months of the year’, adding that ‘strong demand remains for smaller units but the market is facing a severe shortage of prime stock, with no development underway to ease the pressure’.
Bidwells’ research found that in the M1 South region, ‘take-up of 1.9 million ft² is already 20% ahead of the 2023 total’, largely because of ‘a recovery in logistics and distribution demand as a result of improved economic conditions since the start of the year’.
The firm reports ‘low’ availability rates in several regions: 3.0% for Cambridge; 3.8% for Oxford; 4.2% for Norwich and Suffolk; and 5.6% for M1 South.
It forecasts that, by 2029, prime rents will increase by roughly 3-4% per year by 2029 across all markets: 4.7% for Cambridge; 3.5% for Oxford; 2.8% for Norwich and Suffolk; and 2.8% for M1 South.
Mark Callender, research partner at Bidwells, said: “Our latest set of data on the [Oxford-Cambridge] Arc market shows that while logistics is still not at its pandemic peak, the market is more robust than in 2023. Fundamentally, the market forces that sparked investment into logistics during Covid-19 are still strong and long-lasting.
“Beyond the logistics sector, the Arc’s ability to attract top companies across a range of high growth sectors underpins rental growth, but space shortages present challenges for businesses serving the local communities.”
