UK industrial & logistics sector driving investment volumes to record levels
The UK industrial and logistics sector is maintaining its standing as a star real estate investment performer, with new research from Savills revealing that volumes reached GBP3.0 billion in Q3, the second highest third quarter on record.
Transactions now total GBP10.8 billion so far in 2021, already in excess of the GBP10.2 billion invested in the whole of 2020, and could reach GBP12 billion by year end.
New data released by Knight Frank also points to the strength of the sector with the take up of warehouse space having reached 15.7 million sq ft in Q3, bringing the total leased so far this year to 46.9 million sq ft. And 'unprecedented demand' means that 2021 is on course to top the 51.6 million sq ft of space taken in 2020.
Staying in the UK, and the New West End Company, which represents 600 businesses on Oxford Street, Regent Street, Bond Street and in Mayfair, has revealed a collective planned investment of GBP5 billion in London's West End. The funds will be used to bring about a marked shift in the makeup of the area, with 76 per cent of the 22 new and existing developments in question set to be mixed use.
"To secure the West End’s future we need to think bigger and bolder," says James Raynor, CEO, Grosvenor Britain & Ireland. "Only continued investment in the evolution of the place and political support to entice back international visitors will see it able to contribute to the UK economy as it has in past years."
Elsewhere in the capital, Welput, a specialist central London office fund managed by BentallGreenOak (BGO), has committed to develop a 470,000 sq ft ultra-sustainable commercial building in Victoria, the largest speculative office scheme to come forward in London since the pandemic. When complete, 105 Victoria Street will be the UK's largest 100 per cent all-electric, net zero office.
It's not all positive news for the UK though, with the latest Fund Flow Index from Calastone revealing that buying activity in property funds halved in September.
"Unfortunately for fund managers and investors, the dismal news flow in September surrounding food, petrol and labour shortages, energy market disruption and surging inflation are all bad for economic growth, and therefore for the commercial property market," says Edward Glyn, head of global markets at Calastone.
Over in the Emerald Isle meanwhile, Savills says that almost EUR800 million was invested in the Irish property market in the third quarter of the year – some 25 per cent higher than a typical Q3 – bringing YTD investment volumes to EUR3.5 billion, the highest figure on record.
And Savills also says that letting activity in the Dublin office market has picked up strongly in Q3 following a cautious start to the year, with take-up reaching 396,000 sq ft in from a total of 42 completed deals.
"After a dismal H1, the transactional evidence in Q3 has been very encouraging for the office market," says Shane Duffy, Director of Offices at Savills Ireland.
Property Funds World