Thursday, February 25, 2021

2021 Business Predictions: Andrew Gent, director at Gent Visick

It’s that time of year, when Business Link Magazine invites the region’s business leaders to offer up their predictions for the year ahead. 

It has become something of a tradition, given that we’ve been doing this now for over 30 years.

Here we speak to Andrew Gent, a director at Leeds-based property consultancy Gent Visick.

The less said about 2020 the better, so what will 2021 have in store for us and in particular, for the industrial and distribution property sector? Well, “sheds and beds” in the vernacular will continue to remain the leading property sectors as the impact of Covid 19 continues to decimate the high street and casts doubts over the future function and demand for office space.

The pandemic has meant that the global supply of shipping containers has been somewhat dislocated and are not in the usual locations. This has led to a surge of deliveries to UK ports which are struggling to clear these from the quaysides.

This is currently being compounded by additional disruption at ports as companies get to grips with the requirements and paperwork that’s required as part of the Brexit deal.

All this has led to increased demand for warehousing space as companies look to increase their inventories to prevent disruption to either production or sales. Ally this with the acceleration of the switch to online shopping and demand for warehouse space is at an all-time high as indeed is take up.

This year, it’s likely that the lack of supply of both existing stock and development sites for industrial and warehouse properties will help maintain rental and capital values in this sector.

The successful roll out of the Covid vaccines should see most developed economies’ GDP’s recover, albeit that the UK may take a little longer to get back to pre-2020 levels maintaining a reasonable level of demand for warehouse space.

The increased move from bricks and mortar retail to online retail will also see continued demand for both large scale regional and national distribution centres, as well as last mile delivery hubs, thereby adding increased pressure to an already limited land supply.

We’ll also see a continuation of the return of manufacturing to the UK to avoid increased shipping costs and disruption to supply chains.

In summary industrial and warehouse rental and capital values should hold in 2021, due to the imbalance in supply and demand. Plus, with increased pressure on a limited land supply, land values could increase leading to further upward pressure on rents by the end of the year.

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