Latest report from B8 Real Estate reveals North West industrial transactions hit £538m in the first half of 2024 – 7% below the five-year average – but forecasts a stronger second half. Tony McDonough reports
Growing demand for ‘big box’ industrial units in the North West is likely to see a rise in investment in the second half of 2024, a new report reveals.
B8 Real Estate latest analysis of the regional industrial market reveals around £538m of industrial investments were transacted in the first half of 2024. This is 7% below the five-year H2 average of £579m.
However, experts at B8 are predicting the market will pick up in the second half of the year underpinned by increased trading and “strong occupational fundamentals”.
During the first half of the year demand was strongest for prime assets and those with short term ‘value add’ opportunities, and weakest for secondary, tertiary and or ‘dry income’ opportunities.
Supply remained restricted throughout the six-month period with little distress and investors preferring to hold assets with the continued expectation of pricing improving in the future.
B8’s report said: “Overall H1 2024 started well but quickly slowed. Looking ahead to H2 we are starting to see signs of renewed optimism on the back of increased trading and strong occupational fundamentals.”
First half ‘big box’ (100,000 sq ft and above) take-up totalled 1.28m sq ft (eight transactions). Slightly up from the 1.23m sq ft recorded in H2 2023 (five transactions). Take up for H2 is expected to improve with more than 1m sq ft in solicitor’s hands.
Prime Big Box rents are currently £10 per sq ft, with quoting rents now at 10.75 per sq ft. New build MLI / Mid Box take-up reduced slightly in H1, however there are 14 units in solicitor’s hands totalling around 227,000 sq ft.
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Joe Sinclair, associate director of investment at B8RE, said: “The North West industrial sector had a relatively stable H1 2024 in terms of pricing and performed well compared to other property sectors.
“Arguably, the biggest challenge of 2024 has been the lack of opportunities available to investors, stifling activity and the availability of comparable pricing.
“While investors have remained cautious, there remains a significant amount of capital continuing to back the industrial sector, with many investors highlighting the North West’s strong occupational market and future rental growth.”