Rental uplifts boost investor bottom line

By Liza Helps Property Editor Logistics Matters

LONDONMETRIC recorded that occupational transactions added £8.5 million per annum of rent  in this financial year to date.

The investor said it had settled 139 rent reviews since 31 March 2024, delivering £5.7 million of additional rent. This represents a 17% uplift on a five yearly equivalent basis, with urban logistics reviews delivering an uplift of 25%.

A rent regear at three distribution warehouses in Havant, Greenford, and Dudley, saw the combined annual rent increase 51% to £1.4 million as just an example.

Rent levels across the UK have increased markedly in the past five years so that occupiers that took leases five years ago now find that they have quite a rent jump when it comes to rent reviews which are typically held every five years usually on an upward only basis.

Data from MSCI shows that rental growth has averaged 6.5% per annum over the five years to 2023 while the latest research from Cushman & Wakefield notes that prime rents in London hit £28.50 per ft2 with rents in the North west, East and West Midlands ranging from £10.50 – 11 per ft2.