The Impact of Covid-19 on the Multi-let Industrial Market

As the industrial property sector continues to work it’s way through the pandemic, B8 Real Estate (B8RE) have once again remained strong and busy, with an expectation to remain so until the year end. 

B8RE does not solely cover Big Boxes, we also specialise in the vital sub-sector that is Multi-let Industrial (MLI) Estates.

Having previously advised on a large number of occupiers with different relocations, disposals of commercial land and industrial real estate for the last 5 years, B8RE’s Surveyor –Thomas Marriott is ideally positioned to provide insight into the impact of Covid-19 on the Multi-let Industrial Market in the North West.

Thomas who has been out of the office more due to the increased number of viewings, looks back on Lockdown:

B8RE once again topped the H1, 2020 industrial league table for the North West and ranked 6th for the whole of the UK, accounting for over 1.8M sq. ft. across 74 different transactions.

“The occupational market in the North West was very resilient throughout lockdown and despite continued uncertainty over the future with potentially another country-wide lockdown, regional lockdowns, hard recession and Brexit etc, we are still seeing lots of pent up demand for MLI units across the region. We anticipate that the market will remain strong for the rest of the year with record levels of take up and record rents achieved.”

B8RE is the biggest industrial agency department in the North West and is retained on over 150 MLI estates. Between our 6 occupational agents we are averaging, where where circumstances allowed, over 12 viewings each per week compared to an average of 6 viewings each, per week prior to the lockdown.

During the first 10 weeks of COVID-19 lockdown (March 23rd to June 1st), B8RE recorded 620K sq. ft. of take up across 27 separate transactions.

From June to August the team advised on a further 22 deals that have subsequently completed, totalling 270K sq. ft. Units between 500 – 10,000 sq. ft. were very popular and accounted for over 50% of the number of the transactions during lockdown.

Lockdown affected supply chain everywhere in the country, and therefore there were some deals that fell through alongside delays to scheduled refurbishment programming and new developments of units.

The nature of many occupier requirements remained a good mixture, but we did find that many PPE suppliers, parcel delivery and internet based retailers were looking to expand their warehouse or open new depots to meet the increased demand online.

The trends we witnessed in lockdown:

• High conversion rate of viewings turning into lettings.
• Requests from occupiers to agree more flexible lease terms due to uncertainty over the future.
• Occupier timescales becoming more urgent.
• Frequent use of SMART/digital leases from Landlords.
• Use of drones to create virtual tours of properties and other digital marketing tools.

The final quarter of 2020 is in sight and B8RE forecast to be close to a record as activity grows in strength.

If you’d like to learn more about the MLI market throughout lockdown and our thoughts on how the most recent regional lockdown has affected occupier demand, or even the take-up that B8RE were involved in please get in touch with us today.