Amazon and Yodel drive industrial take-up around London

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Major logistical projects by the likes of Amazon and parcel delivery service Yodel drove the take-up of industrial space in and around London in the second half of last year, according to a report by Knight Frank.

In their half-yearly survey of industrial and logistical investment nationwide, the property consultants found that take-up of units of 50,000 sq ft or more last year in London and the South East remained relatively static in comparison to 2014 at 7.2m sq ft.

The report also found that take-up in the second half of 2015 stood at 3.5sq ft, a drop of 7% in comparison to the first half of the year.

The figures underline the importance of retail giants Amazon, and the likes of parcel delivery Yodel to the UK’s industrial and logistical investments, whose major infrastructure projects contributed headline grabbing numbers to the figures.

Amazon’s occupation of a new 107,400 sq ft space at Gateway Basildon, and Yodel taking 98,000 sq ft at G-Park Enfield, were both part of nationwide restructurings that served to prop up stagnant growth in the sector.

However, the report predicts that things will be rosier in 2016 as a shortage of available will space will drive rental growth and lead to more speculative development, particularly in the wider South East

Charles Binks, Partner, Knight Frank Industrial Agency, commented: “Expect to see take up remain steady into 2016, with online sales remaining the key driver of demand. 2016 will see the delivery of a number of spec build units throughout the wider South East and Midlands markets, rebalancing the supply/demand dynamic in certain areas.“