RESEARCH • 16 August 2022

In need of a makeover

Creating value from the UK's old industrial stock


Urbanisation and increasing demand for housing has reduced the availability of urban industrial land. At the same time, new, technology-driven, business models which rely on the proximity to customers has supported demand for urban and near-urban assets. Add to this, much of the existing stock is old and inefficient – put simply, it doesn’t meet the needs of today’s occupiers. In the absence of a large increase in capital expenditure, a significant proportion of stock is at risk of becoming obsolete due to tightening energy efficiency standards. This raises the prospect of demand being compressed into a shrinking pool of lettable buildings. With tenants increasingly prepared to pay for modern, efficient space with improved ESG and sustainability credentials, we believe that there is a  unique opportunity for investors to drive rental growth and create additional value through the refurbishment of older assets in good locations.

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