KBRA UK Releases Research – UK Light Industrial and Urban Logistics Sectors: Storm Clouds Ahead for Rental Growth


LONDON–(BUSINESS WIRE)–KBRA UK (KBRA) releases research highlighting prime light industrial and urban logistics market rental growth in the UK. Over the last five years, the UK has observed extraordinary rental growth across the light industrial real estate sector. According to CBRE, rental growth as of Q2 2022 has been most pronounced in South East England’s North London submarket. The properties in this submarket are often referred to as urban logistics, as they are largely used to support e-commerce.

In the report, KBRA provides an overview of the UK light industrial and urban logistics sectors, as well as examines the attributes that have supported recent rental growth. We also review pooled property-level and lease-level information across three KBRA-rated UK industrial CMBS transactions to compare rental growth on new leases to recent wider property trends. In addition, we assess the ability of urban logistics to withstand inflationary pressures on future rental growth.

While we expect the low supply will continue to support rental growth, the pace will slow as businesses face increased inflationary pressures that have not been seen in decades, which may lead to shifting tenant compositions, tenant insolvencies, rental arrears, and higher vacancy rates.

Click here to view the report.

About KBRA

KBRA is a full-service credit rating agency registered in the U.S., the EU, and the UK, and is designated to provide structured finance ratings in Canada. KBRA’s ratings can be used by investors for regulatory capital purposes in multiple jurisdictions.

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