Global real estate advisor CBRE has confirmed that logistics was the best performing commercial real estate sector in 2016 in the UK, generating an annual total return of 8.6%.
The second edition of the CBRE UK Logistics Index - the first was launched last summer - showed that total returns for the six months to the end of December 2016 was 4.1%, down a little from the 4.4% achieved during the first half of the year.
'Due to the six monthly nature of this data, the impact of the EU referendum is not possible to precisely define. However, given the second half capital growth was positive, the value correction in the wake of the referendum is likely to have been shallow and the subsequent uplift faster than other CRE sectors,' commented Andrew Marston, CBRE national research director. 'Indeed with full year capital growth of 3.1% in 2016, logistics is one of very few sectors to experience net growth during the full year.'
According to the data, the second half's performance comprised 1.4% of capital growth, combined with a 2.7% income return.
CBRE said that the 8.6% annual total return for logistics compares to a 7.2% return for all industrials, as measured by the CBRE Monthly Index. The more specialist logistics sector outperformed the wider all industrial benchmark and did significantly better than the UK commercial real estate sector as a whole, which saw a full year total return of 2.7%.
UK-wide take-up of modern logistics properties of over 100,000 ft2 (10,000 m2), totalled 29.3 million ft2 (2.5 million m2) in 2016, according to the advisor, a major increase on the long run average of around 20 million ft2 (1.8 million m2) per annum.
CBRE said that 2016 was a record year in terms of occupier demand for modern warehousing in the UK.
