In Q3 2024, the UK vacancy rate stabilised at 5.31%, slightly below Q2 (5.55%). During the quarter, three of the seven regions saw a decrease in the amount of stock available in their market.
The amount of space under construction grew in Q3 to 25.5m sq ft, 6% below the same time last year. There were rises of both BTS and speculative space under construction QoQ.
Prime rents increased QoQ in Scotland, Yorkshire & North East, and West Midlands, by 5.7%, 2.9%, and 2.5%, respectively. Rents remained unchanged in all other regions during the quarter.
20 deals completed in Q3, bringing the year-to-date total to 65 deals. This is up from the same period in 2023, which saw a total of 58 deals. 33 units were under offer at the end of Q3, totalling 14.1m sq ft, up 16.6% from Q2 2024.
Over half of this quarter’s deals were from units sized between 100k-300k sq ft, bringing the year-to-date total number of deals within this size bracket to 45. The average deal size so far this year is 261,987 sq ft.
In the 12 months to the end of Q3 2024, third part logistics and distribution occupiers contributed the greatest share of take-up at 28.1%. This sector was followed by manufacturing occupiers at 22.8%.
Logistics Investment
Investment volumes (transactions over £5m) totalled £1.4bn in Q3 2024. Year-to-date volumes total to £4.1bn. In Q3, multi-let deals continued to capture the largest share of investment volumes, at 43%. Portfolio deals contributed the second largest share of Q3 investment at 32%.
By region, the South East captured 46% of Q3 investment volumes (excluding portfolios). The East Midlands and West Midlands followed, contributing 18% and 17%, respectively. In the 12 months to the end of Q3 2024, the South East saw the largest share of investment at 45%.
In Q3, property companies led investment in the logistics sector, representing 28% of investment volumes. This was followed by private equity at 24%, and overseas investors at 17%. In the 12 months to the end of Q3 2024, private equity continues to be the most active buyer group in the market at 31%.
*Data from CBRE report on logistics