Gatwick Regional Industrial Market Update: Winter 2024

There has been reduced take up of industrial space so far this year across the Gatwick region as businesses put their relocations on hold. This has been reflected in the transactional data for 2024.

Whereas in 2023, annual industrial take-up in Crawley was in the region of 700,000 sq ft, owing to several larger lettings to logistics operators, this year it is more in the region of 400,000 sq ft. Despite this, demand for modern ‘green’ industrial units remains high across Sussex.

It is true that the industrial investment market has suffered from the wider economic landscape and a lack of market opportunity, however, with a range of new high-specification units due to market, we remain cautiously optimistic for the Gatwick industrial market for 2025, as Steve Berrett, partner in our Crawley Agency team, explains.

Industrial availability currently sits at approximately 800,000 sq ft, with a further 200,000 sq ft in the industrial development pipeline.

Overall, activity in the industrial investment market has remained subdued in H2, mainly due to interest rate levels but also due to lack of available opportunities.

There remains good demand from a wide range of investors who are seeking opportunities where they can add value either through refurbishment and improving rental income or from owner occupiers looking to invest in their own bricks and mortar.

Take-up so far in 2024, has been from a broad range of industrial warehouse sizes with most demand still within logistics/B8 (storage or distribution). Meanwhile, the logistics sector slowed at end of 2023 and into H1, and this affected the number of transactions for larger sized units (50,000 sq ft-plus).

Industrial occupier demand remains strong

Despite subdued take-up levels in 2024, occupier interest remains strong – particularly for modern, green energy efficient industrial units.

This is most prevalent at the small to medium sized end of the market, where we are seeing the mainstay of activity currently, led by occupiers with lease expiry / break clauses or who have outgrown their current space.

G-Hub, based on Manor Royal, is an example of a prime mid-box development in the Gatwick area.

With one 96,442 sq ft unit remaining, G-Hub boasts a best-in-class specification with EPC Rating of A and BREEAM ‘Excellent’ rating and EV charging points.

Adrienne Howells, Senior Development Director at GLP – owners of G-Hub Crawley, said: “We continue to see demand for modern, sustainable logistics warehouses in prime locations like Manor Royal and that was why we chose to speculatively build G-Hub here in Crawley – to deliver much-needed logistics real estate at a prime strategic location, with the green credentials that we know occupiers need. Our decision to invest in Crawley has been very positive and we now only have just one unit remaining.”

This is more notable in older buildings which are poorly configured or where companies are looking to improve their space to adjust better to more agile and smart working. We are advising astute landlords who are taking note, to consider more investment in ageing assets to bring up their energy efficiency credentials.

We are also seeing larger companies seek to rationalise their assets, often moving from multiple units to a single unit, to reduce overheads and increase efficiencies.

Interest is also still strong for freehold opportunities, largely for owner occupiers looking to come out of leases in favour of owning their own premises to fit out.

Sussex industrial property rents stable

Rents have generally remained the same across Sussex. However, there has been some growth in areas of short supply.

In Brighton & Hove and along the Sussex coast, rents are currently sitting between £16-£18 psf. However, we are seeing £21 psf quoted for some sub-5,000 sq ft smaller trade units.

Panattoni Park Brighton at Shoreham Airport is now built and available to occupy with seven units starting from 19,500 sq ft, and quoting rents in the region of £18 psf.

The highest quoting rents in Gatwick have moved up to £19 psf for new build stock, such as at URBAN Crawley, and are at £13 to £15 psf for refurbished units.

Worthing has new builds under construction with 22 smaller ‘starter units’ from 850 sq ft upwards at the Glenmore scheme on Worthing Business Park, where the quoting prices are in excess of £300 psf. However, this is largely due to this being the first new build industrial development here for 15 years.

We have started to see landlord incentives increase marginally and we will continue to monitor the market over the next few months, as political and economic upheaval bring the potential for unintended consequences on the market.

The speculative Focal Point development at Platts Roundabout will bring over 53,000 sq ft of supply and new developments from Chancerygate and Graftongate at Southwater, will also deliver units totalling 200,000 sq ft of freehold and leasehold space, building a strong pipeline for 2025 and beyond.