According to Savills latest Big Shed Briefing, total sales volumes in the UK warehouse market hit £7.7bn in 2017, up from £6.1bn in the previous year, accounting for 14% of all investment transactions, making it the best year on record for the industrial sector. This significant activity can be attributed to the ongoing popularity of the asset class as it continues to generate attractive returns underpinned by a consistently robust occupier market, “SHD Logistics” reports.
As a result, Savills prime yields for the sector have continued to move inwards with logistics and multi-let estates moving from 5% to 4.5% and 4.75% to 4.25% respectively over the past 12 months. In particular, multi-let assets have become increasingly attractive with investment volumes reaching £3.9bn in 2017, another record figure for the sector. The potential to capture rental growth and drive returns through active asset management opportunities has seen investors swoop on multi-unit schemes with notable deals including Blackrock’s £51 million (3.98% NIY) purchase of Uplands Business Park in Walthamstow from Workman and UBS’s purchase of Stakehill Industrial Estate in Manchester from CEG for approximately £46 million (6% NIY)