Reading some of this report reminded me of what a former managing partner would tell us at every one of his quarterly firm updates - we need to be resilient, and over-reliance on any one client has its risks. It's an approach which works across businesses and markets, so while it may seem counter-intuitive to consider it an encouraging sign that there has been a reduction in take-up by one segment of the Industrial & Logistics 'Big Box' market (e-commerce), when it comes to resilience and diversity, such a drop-off is actually a good thing for the overall market. After the explosion of internet-related take-up (accounting for 40% of space taken in 2020 and 2021), it is a positive sign that the I&L market saw that share drop down to 13% in 2022, particularly when demand last year remained elevated (even if not hitting the 2020/21 peaks). 

With vacancy rates in 'Big Box' units at very low levels (2.5% ignoring sites under construction), and occupier demand seeming to remain strong, even with the economic headwinds we all know about, the expectation is that rents could rise (in core markets). So despite the negative headlines about price drops in the I&L investment market in late 2022, it still looks as though its fundamentals are strong, and it continues to be the case that if you can find right development opportunities (factoring in the complex issue of supply chain pricing, as well as the usual questions of location, planning and demand), there is still money to be made in this market. 

Forward-funding industrial developments (pre-let and speculative) is not for everyone, but they can enable investors to steal a march on those who take a more traditional approach to acquisition: this is an area where we have been pleased to act for clients, getting a great end result. Do get in touch if you would like to talk through the process.