North West industrial and logistics market returns to growth

The North West industrial and logistics market saw a return to growth in 2024 with occupier take up reaching 4.8 million sq ft, marking a 7.5% increase on 2023 and surpassing the five-year pre-pandemic average according to the latest data from Knight Frank.
The North West Logic report also reported a strong and varied occupier base with a notable increase from manufacturers with a 71% year-on-year increase in the sector.
Retail and distribution sectors continue to play a major role across the region, accounting for 26% and 28% of take-up, respectively.
Prime rents hit £11.50 per sq ft with a significant annual growth of 15% reflecting the ongoing demand for high quality units.
The outlook for this year is equally strong with prime rents forecast to rise by 4.5% across the North West and 5.7% in Manchester, underlining the region’s strong market fundamentals.
Sam Royle, partner, Manchester logistics & industrial, said: “The big box development pipeline is limited for the region with only seven units over 100,000 sq ft currently under construction and scheduled for completion in the next 12 months.
“Quoting rents on these new builds are averaging £9.00-£10.00 per sq ft.
“With a slow down in the big box development and a lack of Grade A units in the market we anticipate further competitive tensions from occupiers trying to secure best-in-class units.”
He added: “This is likely to lead to upward pressure on quoting rents as the year progresses.”
Investment activity also turned a corner towards the end of the year according to Knight Frank capital markets partner, Matt Stretton.
He said: “Investment volumes in Q4 were held up by the off-market sale of a cluster of five logistics units and an office next to Manchester Airport, all of which were let to The Hut Group.
“Prime industrial yields in Manchester sharpened by 25 bps to 5.25% during Q4 following six consecutive quarters in which Manchester’s prime yields had bottomed out at 5.5%.
“The adjustment signals the beginning of a new prime pricing cycle and a transition towards what is anticipated to be a more active market in 2025.”
He added: “At 5.25% Manchester’s prime yields maintain a 25-bps discount compared with prime London and South East industrial.
“Most of the activity has been in the multi-let sector, as opposed to logistics where there are a number of estates that have either traded or are under offer. This demonstrates the depth of buyers, particularly for prime locations.
“Premier Park at Trafford Park saw competition from most of the traditional UK funds, which drove pricing from a quote of £37.5m to the price paid by M&G reflecting £46.9m.
“The 20-unit 197,000 sq ft multi-let industrial complex is fully let with 65% of the income subject to a lease event within the next 24 months.”