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Although the investment market for large logistics assets softened in 2023, there are reasons to be cheerful in 2024!
A recent Savills report, titled “Big Shed Prospects”, summarises the market really well with a great deal to be optimistic over the coming year (albeit with challenges). They expect online retail (the key driver) to continue to grow, again demonstrating the importance of the UK logistics market to the UK economy.
Many would argue that logistics is a critical piece of UK infrastructure (where would we be without our 24 hour delivery from well known retailers) and I would support this. The continued demand for on-line retail, in particular, will continue to fuel the UK investment market and with Pro-Logis predicting up to 48m sq ft of demand by the end of 2027 the development market will not be far behind.
Savills Jersey | UK industrial and logistics market outlook – January 2024
We expect online retail, a key driver behind logistics demand, to keep growing, with online retail penetration forecast to increase by 7% year on year, reaching 28.4% by 2027. This growth, using research from Prologis, should equate to additional logistics demand of up to 48m sq ft over the period.
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