Brexit Briefing: The Impact

on the UK Logistics Market

The Impact On The UK Logistics Market
The Impact on the UK Logistics Market

13 July 2016, by Kevin Mofid

Reasons to be cheerful...

Summary

■ Since the result of the referendum very little official data has been released to help us form a view on how the UK logistics sector will be impacted. It will however be crucial to monitor consumer confidence, retail sales (online in particular) and automotive export figures.

■ Fundamentally the supply and demand dynamic in UK logistics is robust. Half year take-up for 2016 is on par with 2015 and even taking into account the committed development pipeline supply is at an all time low. This contrasts dramatically to 2009 when supply was 94m sq ft, compared to 30m sq ft now.

 

■ The initial response in the investment market has been mixed and greater clarity will emerge in the coming days and weeks. Core active buyers remain in the market and post Brexit transactions are now starting to complete, we are also seeing competitive bids for prime logistics units.

■ Should the development market slow down in the second half of the year, as we suspect, then construction contracts could be priced more competitively. In turn this could create an opportunity for occupiers to commit to build-to-suits and developers to build speculatively at lower costs.

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Key contacts

Kevin Mofid

Kevin Mofid

Director
Commercial Research

Savills Margaret Street