The industrial and logistics and office market in the eastern M25 region posted robust performances over the first three quarters of 2022, according to Glenny’s latest Databook.
Industrial leasing activity slowed slightly compared with previous highs recorded in the last two years, with total lettings of just under 4m sq ft. Glenny anticipates full-year take-up will be around the 6-6.5m sq ft mark and says demand for space shows little sign of abating.
John Bell, head of business space at Glenny, said: “The past few weeks have been a bit of a rollercoaster and it’s still far too early to call just how the market will adapt in the medium term. The uncertainty that has arisen is likely to cause developers and occupiers to defer some decisions which is never good for transactional business but, hopefully, the new chancellor will settle some nerves.
“The increase in the cost of finance and its impact on capital markets has certainly caused the investment sector to adjust, but some of these market corrections were already in motion ahead of the failed ‘mini budget’. Our latest research shows that prime yields in the Glenny region have moved out by 50-100 basis points, but the fundamentals of the occupier market are still positive, with an availability rate across our market of just 3%.”
Glenny reported demand for office space in the region rebounded in Q3 2022 with more than 2m sq ft of requirements registered on the company’s in-house system. Most of these requirements are for smaller, better quality accommodation.
However, supply continues to be constrained and there has been a lack of new office development in the region, with the majority of new space focused around London’s Docklands area and East London.
