Marcus Emadi | Director at Turning Point Capital
CONTENTS
Logistics & Industrial Real Estate Market Overview
Despite ongoing challenges and the direct impact of macroeconomic factors on market conditions, there are positive takeaways from 2024. Over the past 12-18 months, market activity has somewhat normalized, revealing several promising trends for the sector. While corporate uncertainty and indecision may persist, 2025 is expected to be a year of steady recovery as businesses begin to look beyond short-term volatility.
In 2024, we witnessed the return of major occupier groups, and early 2025 data indicates renewed activity from the 3PL sector and increased demand for larger big box units. The manufacturing sector continues its transition to modern, compliant logistics and industrial stock, and early signs of improved retail trade suggest a potential increase in activity from multiple sectors throughout the year.
International Trade & Supply Chains
On April 2nd, the US Government announced a program of reciprocal tariffs against more than 180 countries. The “Liberation Day” tariff package caused significant disruption in financial markets and sparked a series of trade wars between the US and other major economies, particularly China. The UK has been relatively spared, with a lower 10% tariff applied to exports to the US. However, the UK logistics and industrial sector faces considerable downside risk, particularly in the automotive and food and beverage sectors, which may experience significant short-term pain. Several UK-based manufacturers have seen share prices fall.
Higher trade costs are likely to impact companies such as Nissan and JLR, which are crucial to the North East and West Midlands markets. Additionally, UK retailers aiming to sell in the US market have diversified their production footprints in anticipation of worsening US-China trade relations. The expansion of tariffs to a broader base of manufacturing economies will dampen the outlook for those that have already moved production and shift focus away from UK real estate. Data from the ONS indicates that Wales and the West Midlands have the highest reliance on US exports at a local level.
