2025-02-13-莱坊-Retail_Warehousing_Dashboard_Q4_2024_2页_738kb

Retail Warehouse Dashboard Summary - Q4 2024

Core Content

This document provides a concise quarterly synopsis of the UK retail warehousing market for Q4 2024, highlighting key trends, investment volumes, capital and rental value changes, and vacancy rates.

Main Points

Investment Activity

• Quarterly Investment Volumes: Retail warehousing investment volumes reached £1.7bn in Q4, marking the strongest quarterly performance in recent years.
• Annual Investment Volumes: Total annual transactions for 2024 reached £3.2bn, significantly higher than £1.9bn in 2023 and £2.7bn in 2022.
• Investor Breakdown: Listed and Private Property Companies accounted for 66.8% of purchases, indicating a broad investment base.
• Yield Compression: Yields across the market compressed, with Prime Open A1 Parks seeing a -50bps compression to 5.25% and Prime Bulky Goods Parks a -25bps compression to 5.50%.

Capital and Rental Value Growth

• Capital Values: Capital values increased by +2.3% quarter-on-quarter, representing the fourth consecutive quarter of growth.
• Rental Values: Rental values strengthened by +0.8% compared to Q3 levels.

Vacancy Rates

• Vacancy Improvement: Unit vacancy rates improved by -30bps to 6.5%, continuing a 16th consecutive quarter of improvement.
• Pre-Pandemic Comparison: Vacancy rates are now -180bps lower than pre-pandemic levels (8.3%).

Footfall and Sales

• Footfall Trends: Footfall was strong in October (+4.8%) but fluctuated in November and December (-1.1% each), compared to All Retail trends of -4.5% and -2.2% respectively.
• Retail Sales Growth: Q4 retail sales grew by +1.5% overall, with Non-Food (+3.8%) outperforming Food (-0.8%).
• Out-of-Town Demand: Demand for certain out-of-town categories was soft, including Furniture (-6.5%) and Household Electricals (-0.4%).
• Discounting Impact: Growth in many categories was discount-led, with volume increases outpacing value gains.

Key Deals

• M7 Portfolio: Redevco acquired the M7 Portfolio for £518m at a yield of 6.75%, from M7 Oxford Properties.
• Anchor Retail Park: DTZ Investors purchased the Anchor Retail Park in Mile End, London for £37m at a yield of 4.45%, from Lothbury Investment Management.
• Ivybridge Retail Park: Patrizia bought the Ivybridge Retail Park in Twickenham for £33.7m at a yield of 4.85%, from Delancey.
• Aldi & Home Bargains: AFH Group acquired the Aldi & Home Bargains site in Bradford for £7.9m at a yield of 6.35%, from KFIM.
• Airport Retail Park: NFU purchased the Airport Retail Park in Coventry for £37.2m at a yield of 6.00%, from LondonMetric.

Key Trends

• Market Performance: Retail warehousing has been a standout sector, with total returns of 12.1% in 2024 and continuing to be a top choice for investors.
• Yield Compression: The trend of yield compression continued, though the gap between different segments widened.
• Occupational Demand: Intense demand for out-of-town retail space has led to record-low vacancy rates, now -180bps below pre-pandemic levels.
• Sales and Footfall: While sales showed modest growth, footfall was mixed, with strong performance in October but declines in November and December. Growth in some categories was driven by discounts rather than value increases.

Key Contacts

• Capital Markets

  • Dominic Walton: Partner, +442078611591, dominic.walton@knightfrank.com
  • Daniel Serfontein: Partner, +442036407037, daniel.serfontein@knightfrank.com
  • Volkan Denli: Surveyor, +44 20 7861 1051, volkan.denli@knightfrank.com
  • Freddie MacColl: Partner, +44 2039 677 133, freddie.maccoll@knightfrank.com
  • Josh Roberts: Senior Surveyor, +442081878694, josh.roberts@knightfrank.com

• Commercial Research

  • Stephen Springham: Partner, Head of Retail Research, +44 20 7861 1236, stephen.springham@knightfrank.com
  • Emma Barnstable: Associate, +442081061385, emma.barnstable@knightfrank.com

Additional Resources

• Quarterly dashboards and weekly Retail Notes are available for subscribers to keep up to date with retail market trends.
• Reports can be accessed at knightfrank.com/research.