The Eastern M25 industrial market is showing signs of improving activity in h2 2024, with take up for the year expected to surpass last year’s total which came in at just under 5.0m sq ft.  Year to date activity (to Q3) stands at 3.8m sq ft, with the Big Box and Mid Box markets accounting for 25% and 18% respectively of the year’s activity to date.

The larger end of the market has remained relatively resilient, with five Big Box deals so far this year along with 11 Mid Box deals.  The main area of weakness has been in the sub 25,000 sq ft market, where activity is down by 14% on last year.  This trend has also been reflected in demand, where there are still a number of larger requirements in the market.  

Demand rebounded to 22.2m sq ft from a recent low of 20.9m in the early part of the year, with the requirements for units above 25,000 sq ft up by 10%. Smaller requirements (<25,000 sq ft) have weakened slightly and now account for 23% of overall demand, the lowest level since the start of the pandemic. 

Increasing supply has become the major disruptor to the market over the past few years, with availability rising to 15.8m sq ft at the end of Q3 2024, up from 12.2m sq ft at the same time last year and 9.0m sq ft two years ago.  Grade A space has become an increasing element of the supply picture over this time as a number of new schemes have been delivered into a weaker letting environment.  Current grade A supply stands at 6.0m sq ft, with a relatively even spread across the four Glenny sub regions.  The most recent trend in supply, has been the increase in second hand availability, with businesses either choosing to upgrade their occupational floor space for better quality stock or just reducing their footprint.   Either way, second hand supply has increased to 9.8m sq ft from 7.2m sq ft 12 months ago, with the overall availability rate in the Eastern M25 market now above the long run average (5.0%) at 5.3%.

Despite the increasing supply picture, the overall balance of the market remains positive, with 22.2m sq ft of demand recorded on our database.  This could of course change quickly but there are reasons to remain generally positive, with take up activity levels showing the early signs of improvement.