Following record levels of take-up and rental growth across 2021 and early 2022, London’s industrial markets saw a marked downturn in 2023 with reduced take-up overall, despite several notable transactions in some submarkets. Records rents were set for mid-box units at SEGRO Park Tottenham, as well as some strong leasing results in Hayes and Enfield.
The one region of London that did not experience this was East London and the A13 Corridor, despite the delivery and availability of high-quality new build and fully refurbished units.
Despite this, there remain a substantial number of reasons to be positive about the immediate and long-term prospects for East London from an industrial and logistics perspective, as well as for wider growth. After all, there are already strong fundamentals behind a business like SEGRO entering into a JV with the GLA to redevelop 86 acres.
We have also seen a marked improvement in leasing activity in the first quarter of 2024. For example, following a small letting in late 2023, Valor have followed this up by recently securing a record rent in at 1B North Crescent in Canning Town (below).
[1B North Crescent, Canning Town]
Additionally, SEGRO has recently fully let SEGRO Park Rainham, securing a rent in excess of £20 psf across 27,000 sq ft, as well as securing a record rent review at SEGRO Park Newham in Barking, with effect from Q2 2023.
The sub-market is still awaiting that benchmark mid-box deal, but with a number of occupiers actively searching for units from 50 – 100,000 sq ft, this type of letting is already far closer than in 2023. We expect East London lettings across the remainder of 2024 to follow the trend of West London, focusing on units with strong ESG credentials, such as Thames Gateway Park from Boreal IM or new-build units in Barking from Bridge or Valor.
[Unit 2 Thames Gateway Park – EPA A+ & BREEAM ‘Excellent’ refurbishment]
At the same time, there continues be strong levels of investment within East London boroughs, both from residential and commercial developers.
We are currently advising the GLA on procuring potential development partners for the remaining 30 acres at Royal Albert Docks, and there remains strong interest from a range of sectors in development opportunities of this scale and location.
[Royal Albert Docks – 30-acre development opportunity]
Additionally, next to the proposed Barratt Homes development in Canning Town (871 homes), a planning application has been submitted for a 651,000 sq ft / 77 MW data centre. Furthermore, GLP’s data centre entity, ADA Infrastructure, is planning a 691,000 sq ft data centre at their Silvertown site.
There is a strong demand for both commercial and residential development locally, which will continue to boost the industrial and logistics activity in the surrounding parts of East London. This is an area with strong long-term prospects as London moves eastwards.
