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5 Things You Need to Know About Big Box Logistics in Q4 2024

1. Big Box take-up for the year reached 28.6 million sq ft, 13% ahead of 2023’s 25.3 million sq ft and 17% ahead of the ‘Pre-Covid’ average (2007-19).

2. DTRE Big Box Vacancy Rate (all units over 100,000 sq ft) rose to 7.2% at the end of the year, up from 6.9% in Q3.

3. Speculative development remains low, with 9.5 million sq ft due to complete in 2025, down 25% on the 10-year average (2014-2024) of 12.6 million sq ft.

4. Industrial and logistics investment volumes totalled £2.4bn in the final quarter of the year, a 9% increase on the 10-year quarterly average. Pushing total volumes for the year to £8bn.

5. DTRE believe the recent move in the gilt market is overdone and will correct itself once the market realises that higher rates are ultimately disinflationary as tighter credit and the rising costs of capital will sap demand, reduce pricing power and ultimately mean the Bank of England can continue on its interest rate cutting cycle.

Despite the wider gloomy economic rhetoric that engulfed the UK during the last quarter of 2024, Big Box logistics take-up rounded out the year with a relatively strong finish, all things considered. Take-up in Q4 reached 9 million sq ft, which was 61% up on the slow Q3 we saw during the summer, 48% up on the ‘Pre-Covid’ 2007-19 average and the second best quarter since the end of 2021.

DTRE recorded 31 deals in the last three months of 2024, meaning it was the busiest quarter of the year and a total of 111 across the year which is 10% ahead of the long-run ‘Pre-Covid’ average. Total take-up for 2024 was 28.6 million sq ft, up 13% year-on-year and 17% ahead of the ‘Pre-Covid’ average.

The biggest transaction of Q4, and the year, by a distance saw Frasers pay £53.5 million to Harworth Group for a 278-acre site near Ansty in Warwickshire for their global HQ. The logistics element of the campus will see the development of five BREEAM Outstanding facilities totalling 3.3 million sq ft. In addition to Frasers, a confidential retailer took 967,177 sq ft at Symmetry Park Kettering from Tritax Big Box Developments and Rockwool signed for 520,000 sq ft at Peddimore, Birmingham. The biggest deal on standing stock saw Oxenwood let their second-hand OXW277 (277,000 sq ft) unit in Dunstable to JD Retail. DSV also leased 215,627 sq ft from ICG to occupy the final available unit at Mercia Park, Appleby Magna following JLR surrendering space.

Whilst Frasers, Nike and B&M were involved in three of the biggest deals of 2024, demand from the retail sector collapsed during the last twelve months. The 3.3 million sq ft Frasers deal, which was concluded on Christmas Eve, took the total volume acquired by retailers to 11.6 million sq ft, but that masks a wider slowdown as the actual number of deals done totalled just 18 for the year. That’s the fewest number of lettings to retailers on record, down 42% on the ‘Pre-Covid’ average and reflective of a wider slump in retail sales and consumer confidence.

Once more the manufacturing sector failed to pick-up much slack with just over 5.2 million sq ft of demand coming from the sector, which again reflected much of the data from the PMI manufacturing surveys and manufacturing GDP. DTRE are yet to see any substantial evidence of the often quoted ‘near-shoring’, ‘re-shoring’ and ‘friend-shoring’ occurring in the UK. Manufacturing take-up in 2024 was 22% behind the 10-year annual average of 6.7 million sq ft we witnessed from 2014-2023. Positively the

3PLs saw another strong year with take-up of 7.6 million sq ft across 2024, which outside of Covid was the second strongest year for take-up on record and 33% ahead of the 5.7 million sq ft 3PL’s typically took per annum prior to Covid (2007-19). This does suggest that the retailers were perhaps seeking to satisfy demand in shorter term, less capital intensive 3PL space with greater flexibility over future certainty of demand for space.

In terms of geographies, the East Midlands dominated take-up accounting for 30% with the supply constrained North West seeing just 2.4 million sq ft of take-up and the lowest level of take-up DTRE have recorded since 2009. Albeit with only 7.9 million sq ft of available standing stock, the North West has the least amount of supply of all the core regions (South East & London 8.8m sq ft; West Midlands 8.9m sq ft; East Midlands 12.7m sq ft; Yorks & Humber 9.3m sq ft), and just three new buildings available bigger than 200,000 sq ft.

The DTRE Big Box Vacancy rate (all units over 100,000 sq ft) did tick up slightly through the quarter and now stands at 7.2%, up from 6.9%. This was predominantly due to 1.35 million sq ft of ‘New’/Grade A product coming to the market whilst there was also an increase in Grade B space of 425,000 sq ft. Total supply stands at 54.35 million sq ft, up 15% year-on-year.

We mentioned last quarter how the pipeline for 2025 looked relatively sparse and that continues to be the case. DTRE are currently tracking 9.5 million sq ft of speculatively built Big Box (100,000 sq ft +) units that will be completed in 2025, which is down 25% on the annual average of 12.6 million sq ft of new spec development completions seen in each year from 2018 – 2024.

The largest number of new units is set to be delivered in units between 100-200,000 sq ft (16 units) but overall there’s a good spread across the other size ranges with Panattoni’s 770,000 sq ft A1M scheme in Harworth and GLP’s MPN761 at Magna Park Lutterworth the two biggest developments scheduled to complete in 2025.

DTRE expects 2025 to be a year of two-halves, with leasing volumes continuing at around their recent quarterly average of 5.5-6.5 million sq ft. Growth areas of the market should come from defence manufacturers as well as the retailers, driven by the return of the grocers. We expect the big grocers to continue in their pursuit of operational efficiencies and to return to the market in the latter half of the year and when allied with a pick-up in consumer sentiment this will help drive overall take-up volumes to be slightly ahead of what we have witnessed in 2024 at around 30 million sq ft.

In a similar vein to the leasing market, the capital markets enjoyed a strong end to the year with just over £2.4bn of industrial stock trading during the last three months of the year, the second-best quarterly total since the Truss/Kwarteng mini-budget in September 2022 and a 9% increase on the 10-year quarterly average (including the ‘Covid’ era).

Overall, industrial and logistics volumes totalled £8bn for 2024, with Big Box logistics assets accounting for 39% of that total. However, as the year ended fresh macro-economic concerns are taking hold once more (sticky and re-accelerating inflation coupled with anaemic UK growth prospects). As 2025 begins, those concerns are most evident in the UK’s gilt market, which is undergoing a significant correction and has potential to destabilise the fragile recovery.

The two largest deals of the last three months were both undertaken by new entrants to the UK’s logistics sector. Firstly, GoldenTree purchased Abrdn’s 40 asset/3.3 million sq ft Apex Portfolio for £351m/7.54% NIY (however only £183m of this was industrial and logistics). Secondly, RN3 Partners acquired Icon & Alpha at Manchester Airport from THG for £180m/4.94% NIY. Other Big Box deals of note were Sunrise’s purchase of a 756,000 sq ft Tesco unit on DIRFT for £105m/4.24% NIY and Mapletree’s purchase of a 629,000 sq ft GXO unit on Derby Commercial Park for £86.1m/5.37%.

Pricing in Q4 remained firm across the board and as had been the case for much of the year, for ‘prime’ product, there was a significant depth of prospective purchasers. Although Premier Park in Manchester and Enfield Distribution Park (ENDP) are more last mile/mid box in nature, both attracted significant interest from UK institutions as well as overseas platform investors. The result being that Premier Park traded 25% ahead of quote (£46.9m achieved vs £37.5m quote) and ENDP traded 10% ahead of quote (£110m achieved vs £100m quote).

Whilst the year looked to be ending positively and the market moving off the lows of the last two years a speed bump has certainly been hit in the last couple of weeks of 2024 which has continued into 2025 and is most evident in the bond market, with the UK gilt undergoing a significant correction in the last four weeks. In the last month the UK 10-year gilt has risen from 4.2% to stand at 4.8%. Whilst the reasons for this are numerous the knock-on effect will be felt within real estate and pricing of real estate assets.

Nevertheless, we believe the recent move in the gilt market is overdone and will correct itself once the market realises that higher rates are ultimately disinflationary as tighter credit and the rising costs of capital will sap demand, reduce pricing power and ultimately mean the Bank of England can continue on its interest rate cutting cycle.

However, there is now no consensus on how many cuts there’ll be this year, with two, three, four or five 25bps cuts all touted by City economists in recent weeks. Needless to say, real estate will respond positively to lower rates.

DTRE Big Box Logistics Report - Q4 2024

As of Q3 2024, laboratory take-up in Cambridge has reached 94,800 sq ft, with 42,300 sq ft transacted in this quarter alone, marking a 12% increase compared to the Q3 five-year average. At the close of the quarter, an additional 10,000 sq ft remains under offer at Cadence, Unity Campus.

Three key transactions contributed significantly to take-up: Immaterial secured 12,500 sq ft of mid-tech space at Accelerator Park, Sawston, and Biocrucible completed the assignment of AbCellera’s lease at the Emmanuel Building at Chesterford, covering 9,800 sq ft.

Overall, laboratory-led demand in Cambridge has reached 899,500 sq ft. Of this, 450,000 sq ft is classified as active demand, down slightly from last quarter as companies continue to wait for funding. The increase in overall demand, however, is mainly driven by larger requirements entering the market in Q3, reflecting Cambridge’s growing appeal to larger occupiers and solidifying its status as an established market.

Vacancies in Cambridge have however increased slightly due to the completion of developments such as 1 Granta Park. As of the close of Q3, 211,200 sq ft of available up-and-built laboratory space is on the market. Despite this rise, Cambridge maintains the lowest vacancy rate compared to Oxford and London, highlighting the resilience and maturity of the Cambridge science and technology market.

To date, Cambridge-based life science and biotech firms have raised £258 million through 67 fundraisings and grants in 2024. While total venture capital raised remains subdued when compared to recent years, the number of fundraisings aligns closely with the five-year average, maintaining confidence that raisings are being achieved, though of smaller amounts.

At the close of Q3 2024, laboratory take-up in London totalled 18,700 sq ft, with three deals having been completed during the quarter. Laverock secured 3,000 sq ft at LBIC Tribeca, as Baseimmune also took 3,350 sq ft of space there, and Myricx Bio acquired 2,000 sq ft at 20 Water Street.

London’s laboratory market remains in its growth phase, with deals so far this year focussing on fully fitted CL2 laboratory spaces under 5,000 sq ft. This reflects ongoing demand from early-stage companies and a developing ecosystem. Encouragingly, there is positive momentum, with an additional 90,600 sq ft of laboratory space under offer by the end of September. Assuming these deals complete before year-end, London will exceed its five-year average take-up (2019-2023) of 99,400 sq ft by 10%.

Total demand for laboratory space in London has reached 785,600 sq ft, with 363,200 sq ft classified as active demand. Notably, 75% of total demand is for space under 10,000 sq ft, reflecting the market’s focus on emerging companies seeking smaller, fully fitted laboratories. However, in recent months, there has been a significant rise in demand for larger spaces, with requirements for units ranging from 10,000 to 30,000 sq ft re-emerging in the market, making up 17% of demand.

This quarter saw a key development with Eli Lilly’s requirement resurfacing and focusing on Kings Cross. Although their space needs have reduced from 75,000 sq ft to 30,000 sq ft, this resurgence highlights the growing demand and improving market confidence in the sector.

A more favourable venture capital environment is fuelling this activity, with £1,026 million raised so far this year by life science and biotech firms headquartered in London, spread across 151 fundraisings and grants. This figure already represents a 48% increase over the five-year average of £694 million. Notably, London-based companies have contributed 66% of the total venture capital raised in the UK’s life science “Golden Triangle” in 2024.

However, despite the robust demand and positive funding landscape, 266,700 sq ft of laboratory space remains available, as the first wave of purpose-built lab buildings continues to enter the market.

In 2024, 103,100 sq ft of laboratory space has  transacted in Oxford, with a further 89,600 sq ft under offer. Notably, when we exclude the Moderna deal at Harwell in 2023, which comprised 65% of total take-up, take-up by the end of Q3 2024 is already 30% higher than the full year prior. If all current deals under offer are completed by year-end, Oxford is projected to surpass its five-year average take-up (2019-2023) by 3%. 


Significant deals include Nucleome securing 17,100 sq ft of fully fitted laboratory space at Inventa and Yellowstone completing 8,100 sq ft at Building 4100, ARC Oxford.

Demand for laboratory space in Oxford has reached 845,300 sq ft, with 503,600 sq ft classed as active demand. New large requirements, specifically those exceeding 50,000 sq ft, now represent 37% of active demand by area (185,000 sq ft).

Despite the strong demand, Oxford still has 255,000 sq ft of available laboratory space, mostly located in out-of-town science parks. In the city centre, Inventa remains the sole source of available laboratory space.

Oxford-based life science and biotech firms have raised £266 million across 43 fundraisings and grants in 2024. Similar to Cambridge, venture capital in Oxford remains limited, falling short of the five-year average of £628 million. However, the emergence of larger requirements in the market does indicate a gradual recovery in market confidence.

Science & Technology Report: Golden Triangle - Q3 2024 

5 Things You Need to Know About Big Box Logistics In Q3 2024

Q3 2024 Big Box take-up has reached 18.4 million sq ft. That’s ahead of 2023 (18.2 million sq ft) but slightly behind pre-Covid averages. The traditionally slower summer market saw 5 million sq ft transact, with the biggest letting being Cain International’s Link674 in Ellesmere Port (674,000 sq ft).


After twelve successive quarters of decline in the rolling annual take-up – Q2 had seen an uptick of 5.6%, suggesting a floor to demand may have been reached. However, that uptick has since been reversed with Q3 impacted by the slower summer months and lack of bigger deals – with only one deal bigger than 500,000 sq ft and only twenty-four deals in total (on average Q3 has seen 44 deals over the last 10 years).

Activity was noticeable from the 3PL’s with EVRi taking three units in Sheffield, Avonmouth and Lutterworth with distributors generally accounting for 39% of the deal volume. The retailers accounted for the largest share of deals with retailers accounting for 44% by deal volume. Tesco at Mountpark Hinckley (491,000 sq ft) and B&M Retail at Link 674, Ellesmere Port (674,264 sq ft) the two standout deals.

A current theme ‘deal friction’ – the time taken for transactions to complete; DTRE are currently tracking close to 9 million sq ft of units that are under offer, of which over half were under offer at the end of Q2. 

In a normal cycle we would have expected these deals to have concluded and added close to 4.5 million sq ft to the total – which would put overall volumes ahead of 2023 (18.2 million sq ft) and the pre-Covid average (21.1 million sq ft).

The DTRE Big Box Vacancy rate (all units over 100,000 sq ft) has remained stationary at 6.8% through the quarter. Vacancy rates have remained unchanged overall even though new build supply is falling because tenants are ‘upscaling’ - they continue to vacate older second-hand units and occupy new and better units. New build units now represent only 35% of total supply - down from over 40% in the previous quarter.

New speculative developments; there is currently only 8.19 million sq ft under construction, of which 6 units (39% by square foot) are in units of over 400,000 sq ft and 39% are due to complete in the remaining three months of this year.

There is just 5 million sq ft of speculative developments to be delivered in the next 12 months – which without any further additions would be the lowest level of speculative completions since 2017 (4.8m sq ft). Even with significant additions 2025 looks set to be well behind the 12.6 million sq ft we’ve seen on average in each year from 2018 – 2024.


Rental growth has remained elevated, despite the effects of inflation fading, ensuring ‘real’ rental growth is being delivered to the sector. In the twelve months to August 2022 distribution warehouse rents grew 14.2% before falling to 6.3% by September 2023.

Rental growth has remained in that range for the subsequent 12 months and at the end of August ’24 annualised rental growth was 5%. However, at the same time the consumer prices index measure of inflation (CPI) has fallen from 11.1% in October 2022 to 2.2% for year to end August 2024.

There is a renewed sense of optimism that we are moving off the bottom and a new cycle is about to begin. The Bank of England’s 25bp rate cut was a positive step but was already ‘priced in’. The next cuts should provide confidence, as the pricing on 5-year swaps and 10-Year gilts move towards sub 3.5% and 3.8%, respectively. Significant dry powder continues to target the sector, and with supply set to fall in 2025, and rents likely to rise, buyers conviction should return.

Q3 saw £1.2 bn of deals complete, with the largest transaction in the sector being Prologis’ purchase of Western Avenue Business Park for £125.05 million from DTZIM, and marking their first significant deployment in over a year. The largest single asset transaction was Pontegadea’s 1st purchase of a UK logistics asset at SEGRO Park, Heathrow for £65.5m. The largest portfolio was Mirastar & KKR’s purchase of Project Tournament a collection of five single let “Big Box” assets for £115.25m. DTRE advised the purchasers on all three transactions.

The £1.2 bn transacted in Q3 has resulted in volumes reaching £4.4bn by the end of September, 8% ahead of the pre-Covid average (2010-19). Of note is that this is the first quarter of the year where volumes were not supported by large M&A activity, with five deals over £50m equating to 44% of the volume during the quarter. 

The further anticipated rate cuts should help grease the wheels of the capital markets, with 5-year swaps now trading at 3.6%, down from 4% in early June and the cost of debt on good quality logistics assets shrinking by c.120 bps since the start of Q2’24.

However, whilst Q4 will likely be busier, typically there remains a 25bps ‘bid/ask spread’ – with core investors starting to return we are seeing the return of competitive tension and the potential for that gap to start closing. Outside of the Big Box sector we have seen examples of this with reversionary mid box schemes trading in the low to mid 3’s.

DTRE Big Box Logistics Report - Q3 2024

This report provides a comprehensive analysis of the relationship between sustainability credentials, rental growth, and investment value within the industrial and logistics market. By examining data from 133 million sq. ft. of leasing transactions, conducting a solar survey with 20 companies, and engaging 125 participants across 80 firms in a sustainability survey, we uncover key insights into how sustainable practices impact asset performance. 

The findings reveal that properties with strong sustainability credentials not only attract higher rents but also deliver greater investment value and resilience in the market. This report serves as an essential guide for investors and developers, offering practical tips and insights into ways investors and developers can capitalise on the evolving landscape.

Investors are becoming sustainable investment intelligent, with 74% considering ESG in every transaction and 56% costing decarbonisation pathways during acquisitions. 

Despite no legislative pressure, the market is targeting Green+ refurbishments driven by perceived rent and yield premiums.

The rental premium between EPC A and B is widening, but there is no premium for EPC A+.

The rise of green capital is not only targeting prime assets, offering a yield improvement of 10-25 bps but also paying a premium for assets that have a clear decarbonisation strategy.

Net zero pressures have redefined the transaction process, 70% of purchasers are requesting consumption data during transaction due diligence. 

Power is the biggest challenge to the industry, 59% of developers have abandoned an acquisition due to power concerns.

Flood has been identified by 83% as the greatest physical risk but climate-related risks are not considered a priority.

The Industrial & Logistics Sustainability Handbook

5 Things You Need to Know About Science & Technology in the Golden Triangle

Laboratory leasing activity across Cambridge in the opening half of the year reached 52,500 sq ft, falling 40% from the highest H1 recorded in 2023 (87,400 sq ft) but positively remaining 20% above the H1 5-year average (41,600 sq ft).

Take up was led by lettings at Unity Campus as Welbeck Health Partners leased 31,000 sq ft at Orion, and ViaNautis (Soma Serve) secured 10,800 sq ft of fitted space at Cadence, also on the park.

At the close of H1, there was a further 31,000 sq ft under offer which we expect to complete in Q3.

Demand for laboratory space remained robust in Cambridge, with 783,000 sq ft of named demand at the close of H1. Of this, 478,500 sq ft is active demand and 304,500 sq ft is upcoming demand, with the majority temporarily put on hold due to wider macroeconomic uncertainties.

We have seen an increase in 50,000 sq ft + requirements coming live, more than in the rest of the Golden Triangle, now representing 38% of demand. Importantly, we are also still seeing the growing demand for smaller, fully fitted laboratories by occupiers looking to take turnkey space, with requirements of up to 20,000 sq ft representing 20% of demand.

This change in demand profile underscores the importance of providing a variety of fit out specs to appeal to the broadest range of demand/occupiers.

At the end of H1 there was 151,000 sq ft of available up-and-built laboratory space, with the majority located within the southern Cambridge cluster across Granta Park, Babraham Research Campus, The Press, and Unity Campus.

Excluding the southern cluster, there is practically no up-and-built laboratory space available for immediate occupation in Cambridge, maintaining a strong supply-demand imbalance.

In response to this supply-demand imbalance, there is 4.7 million sq ft of laboratory-led space due to be delivered by the end of 2028. Of this, 17% (799,600 sq ft) is currently under construction or being repurposed which will help alleviate the supply restraints in the short term and support leasing activity across the next 12 months. 18% of the pipeline however is still subject to planning.

With demand continuing to outweigh supply, rental growth prospects remain strong, with several schemes providing fitted space quoting over £70.00 per sq ft.

£119 million was raised by 46 life science and biotech companies based in Cambridge across H1, a 28% decrease on venture capital raised in H1 2023.

Whilst the sluggishness of venture capital funding has persisted into H1 2024, the wake of the election and the improving economic landscape should recover sentiment and motivate investment into these companies. It will also encourage companies that have successfully raised to satisfy their space demands.

Since 2019, Cambridge-based companies have collectively raised £3.6 billion - capital that will be directed into real estate once the climate steadies.

Laboratory take up in Oxford throughout H1 2024 reached 77,100 sq ft, 22% above take up across Cambridge and London combined.

At the end of June, there was a further 29,800 sq ft of laboratory space under offer, with 57% having already transacted at the beginning of Q3. If the remainder of this space completes, take up in Q3 looks to be in line with the 5-year average take up across the third quarter (31,500 sq ft).

Take up in H1 was led by the Ellison Institute leasing 27,800 sq ft at Winchester House on The Oxford Science Park, and OrganOx taking 17,700 sq ft of space on an assignment at Building 3500, ARC Oxford.

Further leasing activity in the second half of the year will be driven by the 451,200 sq ft of named demand for laboratory space, of which 332,000 sq ft is active. Of this demand, 48% is for space smaller than 20,000 sq ft, with 38% for space from 20,000-50,000 sq ft, and 13% for space over 50,000 sq ft.

At the end of H1 there was 282,000 sq ft of available up-and-built laboratory space in Oxford, with just 45,400 sq ft of this in the city centre, and the remainder across Milton Park, Abingdon Science Park, The Oxford Science Park, and Begbroke Science Park.

There is 898,600 sq ft of space currently under construction/refurbishment, with 23% (205,000 sq ft) of this space already accounted for.

Of the 4.8 million sq ft we are tracking to be delivered by the end of 2028, 31% (1.5 million sq ft) is to be built in the city centre.

Fitted laboratory rents in Oxford have increased to a new headline rent of £82.50, achieved in Q1 at the Sherard Building on The Oxford Science Park as Oxford Nanopore leased 13,000 sq ft of fully fitted space.

32 Oxford-based life science and biotech firms raised £263 million through fundraisings and grants in H1 2024, reaching 9% above the pre-covid full-year 5-year average. Overall, Oxford-based venture capital was the most consistent out of the Golden Triangle, falling the least from the total raised in 2023.

Despite this, Oxford-based companies have similarly echoed the theme seen across the wider Golden Triangle in their hesitancy to exercise their capital on real estate, with many choosing to remain in their current space until the macro environment settles before expanding or upgrading.

Since 2019, Oxford-based companies have raised £3.4 billion, which will slowly be released as sentiment improves and several tenants that have previously put expansion plans on hold reactivate their search.

London laboratory take up slowed in the first half of 2024 with 10,300 sq ft transacting, 70% below H1 take up last year despite Q1 2024 being 42% above H1 2023 take up (7,300 sq ft). This leasing slowdown can be attributed to the relatively nascent state of the London market and the high quoting rents.

London is the most embryonic of the Golden Triangle markets, so with national and economic unrest and uncertainty over the past year, it has not been able to rely on its deep-rooted and pre-existing markets to the same extent that Cambridge and Oxford have been able to, hence experiencing the impacts of a lack in confidence more heavily.

This was further evidenced in take up by deal size, with all deals occurring for space less than 5,000 sq ft. The largest deal by size occurred at Paper Yard, Canada Water, with Prosemino taking 3,000 sq ft of fully fitted space in Q1.

A further 11,100 sq ft of laboratory space was under offer at the end of June. With additional fitted laboratory space already going under offer early into Q3 we look forward to a positive turn in the second half of the year.

This will further be driven by the 752,200 sq ft of named London laboratory demand, of which 636,200 sq ft is active. Of this demand, 3 requirements are for 50,000 sq ft +, corresponding to 47% of demand, with 28% of demand for space less than 20,000 sq ft, and 26% for space between 20,000–50,000 sq ft.

Science & Technology Report: Golden Triangle - Q2 2024 

5 Things You Need to Know About Big Box Logistics In Q2 2024

Cautious optimism has returned to the Big Box logistics market in the last three months, with some big requirements providing a boost to take-up numbers and the slowdown in development completions ensuring that the vacancy rate is now on the turn.  DTRE expects this positive momentum to carry on through the remainder of the year.


Take-up in the second quarter has reached 6.35 million sq ft, which is up 11% quarter-on-quarter and at the halfway stage of the year, 2024 is in-line with 2023’s 12.1 million sq ft. The second quarter has seen some big occupiers finally sign for space, such as Nike taking 1.3 million sq ft at GLP’s Magna Park Corby scheme, which has boosted the overall take-up number. We also witnessed 7 deals for units of greater than 300,000 sq ft – which is more than any other Q2 outside of the Covid years. 

As a result, we are now seeing some take up momentum for units between 300-400,000 sq ft, which at the turn of the year accounted for nearly a third of all Grade A supply. Deals at Ergo 354 in Fradley (Super Smart Services), Unit 1 Orwell Logistics Park (EDF Energy) and MPS9 Magna Park South Lutterworth (CEF) have all helped in both boosting take-up and reducing the vacancy rate.

However, take-up of units between 100-300,000 sq ft was just 2.3 million sq ft in Q2 - that’s 29% down on the pre-Covid average. Furthermore, second-hand units of between 100-200,00 sq ft saw virtually no lettings at all, which we believe reflects the preference for newer, sustainable, and future-proofed assets.

The DTRE Big Box Vacancy Rate stood at 7.2% at the end of Q1, but we are pleased to report that has trended downwards over the last three months and now stands at 6.8% at the end of Q2 with 4.26 million sq ft of take up of standing stock, reducing overall supply to just over 51 million sq ft. The ‘split’ is now 21 million sq ft ‘New/Spec Built’ and 30 million sq ft classified as ‘Second Hand’.


We can also report that the continued slowdown in new speculative completions, and this, coupled with the existing unsatisfied occupier demand will ensure that downward pressure on vacancy rates will continue for  12 months at least given the structural delay required to implement new build starts on site.

Currently there is approx 8 million sq ft of existing warehouses under offer and whilst it’s difficult to forecast the extent of further second-hand or grey space being added to the market, there’s only 960,000 sq ft across 6 units of new development, all between 102,000 sq ft and 240,000 sq ft, that will reach practical completion by the end of Q3. As a result, we expect the vacancy rate to compress further to 6.3% by the end of September.

MSCI’s latest Monthly Index showed rental growth for distribution warehouses was just 0.23% in May (annual rate of 5.7% to end May), which is the lowest monthly level since peak-lockdown in January 2021 and unsurprising given the hike in the vacancy rate over recent months. But with vacancy now on the turn, development slowing and occupier demand, particularly for ‘New/Grade A’ product on the rise, we expect to see rental growth pick up once more from here on for the remainder of 2024. Despite the statistics, DTRE have continued to experience strong rental growth in core markets at beyond these levels. 

At the end of the quarter some cautious optimism has returned to the capital markets. Sentiment is starting to improve and in a few limited examples competitive tension has returned. One Swallow does not make a Summer – perhaps it may make an Autumn? With the likelihood of a new government and with the Bank of England expected to cut rates in either August or September, we expect the ‘Bid/Ask’ spread which has held back the market for much of the year to narrow and a busier second half of the year will unveil with increasing levels of stock expected.

Q2 saw £1.8 bn of deals complete, with the largest transaction in the sector being Tritax’s purchase of Abrdn’s UKCM which included c.£270m of logistics assets. The largest single-unit deals saw Ceva Logistics purchase its own warehouse at Rockingham Gateway from Mulberry for £78m, whilst M&G sold a Co-Op distribution unit in St Helens, just outside of Liverpool, to Brookfield for £59m/5.79% NIY. 

At £1.8bn, trading volumes in Q2 have increased 63% on what we saw in the first three months of 2024, and this cautious optimism is largely mirrored in the bond and swap markets. 5-year swaps are now priced at 3.95%, down from the 4.1% - 4.2% range where they have spent most of Q2 with a similar story playing out in the bond market for UK 10-year gilts, as investors price in interest rate cuts as inflation has tumbled down to its 2% target.

Pricing has remained firm through the quarter, particularly for assets with reversion and with little to no sign of distress in the sector, a phenomenon hopefully confined to the US and office sector, we expect both direct pricing and valuation yields to remain stable for the remainder of the year, with some inward movement for assets with open market rental mechanisms.

In fact, the ’Bid/Ask’ spread, which has narrowed marginally during Q2 should continue to see the gap close over the forthcoming quarter as swaps (5-year) and gilts (UK 10-year) dip under 3.9%. This could unlock a number of deals, including some larger deals and portfolios which have continued to be conspicuous by their absence.

Finally, and surprisingly, (and unlike in France) the UK’s general election has not seemingly spooked the investor community this time around, as it has done in the past, with investors much more focused on the latest CPI print and the bank rate, rather than whether it’s a Labour or Conservative government.

To that end, we don’t expect to see any disruption caused by a change of government. Indeed, if Labour, who are on average 20 pts clear in the polls, do form the UK’s next government then their proposed reform of the planning laws, intended to promote housing development, should also be seen as an unintended boon to logistics.

DTRE Big Box Logistics Report - Q2 2024

5 Things You Need to Know About Offices, Science & Technology in Cambridge

Take up of lab and office space in Cambridge reached 202,700 sq ft in Q1, the highest Q1 on record, and a 43% increase on the 2023 opening quarter of 141,700 sq ft.

Lab take up alone reached 51,400 sq ft in Q1, the highest opening quarter for lab take up in Cambridge to date - c.4.5 times on Q1 2023 of 11,500 sq ft, and 7.5 times on the Q1 5-year average (2019-2023) of 6,800 sq ft.

Lab take up was dominated by Welbeck Health Partners taking 31,000 sq ft at Howard Group’s Unity Campus as shell and core space on a 30-year lease, and ViaNautis securing 10,800 sq ft of fully fitted labs at Cadence, also at Unity Campus, for a term of 10 years.

In terms of demand, we are tracking 708,000 sq ft of named lab demand in the market, of which 483,500 sq ft is for live, active requirements. Of this total named demand, 72% of requirements are for space smaller than 30,000 sq ft, and 31% for less than 10,000 sq ft. This breakdown reflects an increased number of smaller lab requirements, a theme we are seeing across the Golden Triangle, but it is important to note that Cambridge does currently have more 50,000+ sq ft requirements than either Oxford or London, with four 50,000+ sq ft active lab requirements alone - a testament to its more established market.

Lab activity remains constrained, with just 97,000 sq ft of up-and-built lab space available at the end of March, the majority of this being located within the southern Cambridge cluster – notably Babraham Research Campus, Granta Park, Unity Campus, and Chesterford Research Park. With current interest being expressed on some of the space, the supply-demand imbalance will maintain upward pressure on rental levels during the course of the year.

Additional lab supply totalling 190,000 sq ft is on track to be delivered over the next nine months, with the completion of 1 Granta Park by BioMed Realty and the refurbishment of the former AstraZeneca building at 310 Cambridge Science Park. Interestingly, two office-to-lab conversions will also come on stream – Longfellow’s re-purposing of the first building at CamLIFE and the conversion of a 2 storey office at 316 Cambridge Science Park into a 50:50 lab:office. 

Following the completion of 1 Granta Park, Mission Street's 60,000 sq ft second phase of The Press at Foxton will be delivered at the end of the year and Abstract’s South Cambridge Science Centre will provide brand-new purpose-built lab space in Cambridge, delivering 138,000 sq ft by Q2 2025.

There has been a decrease in venture capital received by life science and biotech companies in Cambridge this quarter, with £58 million raised, down 68% on £180 million, the average raised across each quarter last year. Despite the venture funding slowing in the past quarter, these raises will still positively add to the growing pool of capital waiting to be deployed into the market once macroeconomic conditions settle further and confidence grows.

The office market led transactions in Q1, making up 75% of take up and totalling 151,300 sq ft, with most deals falling into the opening quarter after being under offer at the close of last year. This represents a 16% increase on recorded take up for the equivalent period in 2023 of 130,200 sq ft, and 73% above the Q1 5-year average (2019-2023) of 87,500 sq ft.

The two largest deals of the quarter occurred at Cambridge Science Park as AMD took the assigned 44,600 sq ft Napp Pharmaceuticals lease at Building 196, and Cambridge Mechatronics signed for 21,000 sq ft at Building 306 on a 10-year term. Further at the park, Pragmatic Semiconductor expanded by 13,700 sq ft within Building 400 to now occupy the whole building for a 10-year term.

Other notable deals include Power Integrations leasing 14,400 sq ft at Orchard Street’s Radio House for 10 years, and Five AI taking 5,500 sq ft at Fora, 20 Station Road at a rent of £100.00 per sq ft all-inclusive.

Demand for offices continues albeit at a more subdued rate compared to the science and tech sectors, with named demand tracked at 339,000 sq ft. Of this demand, 91% of requirements are for spaces smaller than 30,000 sq ft, with 61% for spaces less than 10,000 sq ft with much of the demand for small suites centred on the key city centre locations on Hills Road and Station Road. Occupier downsizing and the flight to quality are still very much continuing trends throughout Cambridge.

This quarter, overall office vacancy reached 7.6%, with 572,700 sq ft of office space* available across Cambridge, down from 8.8% last quarter. 60% of availability was in the North Cambridge cluster, with the Crown Estates’ Building B and Newnham House at Cambridge Business Park offering 42,500 sq ft and 42,900 sq ft of Grade B office space, respectively. 

There was 215,800 sq ft of Grade A office space* available at the close of Q1, equating to a 2.9% vacancy rate, remaining in line with last quarter. City centre Grade A supply remains tight with only 107,900 sq ft available at Brydell’s Generator on 42 Newmarket Road, 10 Station Road, Fora at 20 Station Road, and Brooklands, which completed this quarter, with 28,000 sq ft already pre-let to Siemens.

According to DTRE Research, the 5-year average quarterly average Grade A office take up (2019-2023) stands at 74,500 sq ft. With just 215,800 sq ft of available Grade A office space in Cambridge, there is under nine months of Grade A office supply remaining.

Despite strong activity on the occupational front, there were no investment transactions for offices and labs across Cambridge in Q1.

The themes we identified at the close of 2023 are still in play, where negative sentiment still surrounds the shifts in working practices, hesitancy due to macroeconomic conditions continues to linger, despite the UK economy appearing to turn a more positive corner, and planning challenges across Cambridge persist.

In the office market, we are seeing the dislocation of investor sentiment with the market facts. We are recording strong fundamentals, with demand remaining strong, take up reaching 73% above the Q1 5-year average, and low supply figures helping to push the rental tone. In light of the above, we are anticipating yield compression once investor sentiment recognises these positive messages. We do remain hopeful for a more active rest of the year but believe this switch will truly come into play at the start of next year.

Despite the lack of historic transactions for up-and-built lab buildings, we are confident in a more positive second half of 2024 for the science and technology capital markets, as we expect the trading of the first stabilised lab buildings in Cambridge to occur. The lack of this product in the market should attract strong investor demand and will inject confidence into the science and technology market.

Office, Science & Technology Cambridge Market Report – Q1 2024

5 Things You Need to Know About Big Box Logistics In Q1 2024

The occupational market has got off to a sluggish start in 2024, with a combination of factors ensuring that the quarterly volume for new lettings reached just 5.6 million sq ft, that’s down 16% quarter-on-quarter and the slowest start to a year since 2019. However, there remains reasons to be positive as we move into the second quarter. 

Whilst the slowdown in occupier demand can be attributed to a number of macro-economic factors, ‘transaction friction’ has also increased significantly. Legal and ESG due diligence processes appear to be the main contributors, although C-Suite decision making is slower than it has been.

However, DTRE are currently tracking 7.6 million sq ft of logistics units that are under offer and should all those units complete by the end of June 2024 then take-up for the half-year will be 10% ahead of the “Pre-Covid” average.

Looking at Q1, the Midlands led the way accounting for almost 60% of all demand, split 40% East Midlands and 19% West Midlands, with Yusen Logistics’ 1.2 million sq ft pre-let at SEGRO’s Northampton Gateway accounting for 47% of the Midlands total.

In total, twenty-two deals signed across the first three months of the year, with 100,000 - 300,000 sq ft being the most popular building size, accounting for 77% of take up. Positively, particularly given the availability of assets in the 300,000 sq ft size bracket, take-up for bigger units was 14% ahead of the “pre-Covid” quarterly average (2007-19).

The level of supply and in-turn the vacancy rate has continued to creep up at the start of 2024, albeit it at a much slower rate than we saw throughout 2023. By end Q1 2024, the DTRE Big Box Vacancy Rate had only reached 7.2% up from 6.9% at the turn of the year.

However, we believe this will be the ‘peak’ vacancy and that the headline rate will trend downwards through the remainder of the year. There is only 7.6 million sq ft of new speculative development due to complete in 2024 – this will be the lowest level of new speculative completions of Big Boxes in seven years.

At the end of 2023, there were 24 assets available in the 300,000-400,000 sq ft size range; encouragingly 5 units are now under offer and with no significant new supply expected, this sector should see further decreases as the year progresses.

Finally, rental growth continues strongly and is being driven by the demand/supply dynamics that have underpinned industrial and logistics for the past ten years, rather than inflationary pressures. The latest MSCI Monthly Index for end March showed annualised rental growth of 6.9% for the industrial sector (see below).

Whilst rental growth had tracked closely with the UK’s CPI for much of 2023, by autumn it had de-coupled,  and we are now seeing real rental growth of 370 basis points over the latest annual CPI number of 3.2% for March.

The themes that have dominated the capital markets for the last twenty-four months continue to persist and whilst bouts of optimism have appeared over the first three months of the year, they have also receded just as quickly, as capital sits on the side lines awaiting a definitive signal from the world’s central bankers.

The result of this hesitancy in the capital markets has meant that just £1.1bn of industrial and logistics has traded over the quarter, down 21% on the 10-year ‘pre-Covid’ average (2010-19). Larger transactions and portfolios remain largely off the radar, and this is reflected in the fact that only four deals occurred over £50m in the quarter.

The biggest deal of the quarter saw the US fund manager Ares (advised by DTRE), purchase Project Armitage, a highly reversionary 1.84 million sq ft portfolio from Royal London for £175m/5.5% NIY in an off-market transaction. Elsewhere, the industrial & logistics apportioned pricing for the LondonMetric/LXI merger helped boost the end quarter volume by a further £163m.

Whilst the UK economy has turned a corner and the threat of a prolonged recession is in the rear-view mirror, the bond and swaps markets tell of the bumpy path endured year-to-date as well as providing a pre-cursor to what lies ahead. 

At the start of the year and on the back of the US Federal Reserve signalling they were likely to undertake four rate cuts during the course of 2024, UK 10-year bond yields were trading at 3.4%, however, as the prospect of both a) when the first rate cut will be and b) how many there’ll be this year, the UK 10-year has moved upwards and now stands at 4.3% (17th April).

The swaps market tells a similar story, with 5-year swaps at 3.5% at the start of 2024 and now standing at just a nudge over 4.1% (17th April).

Whilst corporate activity in the listed sector is on the rise - as undervalued businesses receive attention from bigger players seeing an opportunity to create scale - in a pure property transaction sense, the shift in bond yields and swap rates since the start of the year has meant capital has been hesitant, particularly for the bigger ticket lot sizes. Unfortunately, we expect more of the same ‘wait and see’ approach for the next 3 months at least, with transaction volumes remaining depressed whilst the ‘bid/ask’ spread remains too wide.  

Significant dry powder continues to admire the sector, and with the Big Box vacancy rate about to turn a corner, real rental growth continuing and a 25 bps cut to interest rates to come in Q3, we remain hopeful of a busy end to the year.   

DTRE Big Box Logistics Report - Q1 2024

In Q4 alone, combined lab and office take up in Cambridge reached 243,700 sq ft, lifting total
annual take up to 673,300 sq ft, 16% above the 5-year average. For space over 10,000 sq ft, lab
take up exceeded office lettings by 6.4% (15,000 sq ft), a first for the market.