With the recent hype surrounding the industrial investment market it would be understandable to assume 2018 would have been another record year for the sector.
However, transactional volumes in the year to date (YTD) stand at just under £8.2bn, reflecting a surprising 20% reduction on the same period in 2017. Whilst volume is down, the average weighted yield has followed the trend of the past 10 years and seen further compression, currently standing at 5.67%. Although a steadier adjustment to previous years, this illustrates that it is not demand but supply that has kept the reins on transactions in 2018.
The uncertainty surrounding Brexit continues to encourage a defensive mind-set and is the core driver behind reluctance to sell, particularly among vendors sitting on larger assets. However, with limited supply, high demand and record yields don’t the current market dynamics suggest vendors should strike now whilst the iron is hot?
Allsop’s recent experience in the industrial investment market would suggest this is the case. Over the past three months our National Investment team has successfully transacted over £111.5m of industrial investments. During this period we have achieved sale prices in excess of quoting prices by an average of 12%, record yields obtained and a flurry of new entrants to the market.
Download our Industrial Investment Market Update 2018 for full market analysis