Sluggish start to year for industrial and logistics take-up
The opening three months of 2025 saw 550,000 sq ft of shed space let across the North West, 50% less than the previous quarter, according to research by Knight Frank.
However, the rolling 12-month take-up figure is 14% higher than the previous year while just shy of 1m sq ft of space is currently under offer, the consultancy said.
Notable deals in the first quarter of 2025 included Finsa UK’s 160,000 sq ft letting in Birkenhead and Sterling Event Group’s 103,000 sq ft transaction at Icon 4 near Manchester Airport.
Knight Frank partner Rob Tilley said: “An active end to the year for take-up has been followed by a quieter than expected first quarter.
“However there are a number of active requirements in the market which should bolster the H1 statistics.”
Tilley said some deals were being held up due to “general economic uncertainty”, while a lack of supply is having an impact on rents.
“A lack of good-quality units in prime locations is still pushing headline rents upward,” he said. “While increased availability in the second-hand market is allowing for more choice with some landlords being forced to offer increased incentives.”
While the occupational market has been subdued, the investment market has seen a similar level of activity in the first three months of 2025 as the last three of 2024, according to Knight Frank.
Some £285m of deals were recorded in Q1, which is down year-on-year
Notable deals include Network Space’s sale of Broadheath industrial estate in Altrincham to M7 for £47.4m and Tritax Big Box REIT’s acquisition of a Sainsburys 626,000 sq ft distribution unit at Haydock for £74.25m.
These deals reflected net initial yields of 5.04% and 6% respectively.
“The strong levels of investment activity in the final quarter of 2024 have continued into the first quarter of 2025, albeit volumes are down on the same period last year,” said partner Matt Stretton.
“While transaction volumes are down we are witnessing a good depth of investor demand, particularly for well-located assets. We continue to see strong demand from overseas investors, whilst institutional capital has so far been underrepresented compared with previous years. However we expect this to shift as the year progresses.”
