Occupiers face rent hikes at rent review and lease renewal
Occupiers face considerable rent hikes on lease renewals and rent reviews following huge rent increases over the past five years. Wincanton saw a 28.8% rent hike when it secured lease renewal at its distribution centre in the Midlands recently.
By Liza Helps Property Editor Logistics Matters
THE 3PL secured a 10-year lease renewal on its 375,000 ft2 warehouse at Midpoint 18 in Middlewich from landlord Warehouse REIT at a new rent of £6.50 per ft, rising to £7 per ft2 at the end of the fifth year – this was a 28.8% uplift on the previous passing rent. The 3PL did manage to agree an occupier break in years three and five.
Whether an occupier is seeking a new facility or whether they face a rent review this year, the rent hikes are expected to be considerable, compared to five years ago (the typical length between rent reviews).
London Metric Property recently reported that lettings and regears on 12 urban logistics warehouses added £1.9 million of rent per annum, reflecting an average uplift of 39% against previous passing rent.
That is not unusual across the board be it big box or urban facility. In its latest annual report to 31 December 2024 Tritax reported a 34.6% increase in aggregate across open market-linked rent reviews settled in 2024 while SEGRO saw a 43% rise in rents at review and renewal over the same period.
