Featured Sector: Industrial

The first quarter of 2014 saw a 65% increase in the underlying value of project starts, as demand rises for both factory and logistics facilities.The second half of 2013 saw a 32% rise in the value of project starts compared to the same period of 2012.

Despite this recent growth, the flow of new industrial premises under construction was knocked back last year, with a 7% fall in the value of new projects starting on site during 2013 as a whole. This is due to a slowdown in development activity during the first half of 2013, and has caused an undersupply of good quality industrial and logistics space.

CBRE have reported that vacancy rates for ‘big box’ logistics premises are at an all-time low, and there is strong investment and occupier demand for industrial premises. This demand will drive a continued fast rate of development growth during 2014.

This tight supply of logistics space, and recent improvements in manufacturing and production output, will stimulate investment into new premises. This has already translated into the fast growth in project starts seen during the second half of 2013, while the steady flow of planning approvals suggests this growth will be sustained during 2014.