Logistics is our largest sector weighting
The logistics sector continues to benefit from structural tailwinds and attractive rental growth. Our logistics assets are spread across urban, regional and mega warehousing with urban logistics our preferred sub-sector for organic rental growth and our strongest conviction call for a number of years.
We have built up a high quality logistics platform
LondonMetric has increased its logistics portfolio over a number of years, primarily through portfolio acquisitions and M&A activity. The assets provide strong reversionary prospects and are well located.
£ 4.0 bn
Portfolio value£ 213 m
Contracted rent320
Assets10 years
WAULTSub sectors of logistics
Urban logistics
Smaller logistics warehouses strategically located in or close to dense areas of population to allow occupiers to minimise delivery times, increase accuracy of delivery and satisfy consumer demands for instant gratification. Our urban logistics exposure has grown from £0.2 billion in 2017 to £3.0 billion today reflecting substantial investment in this sub-sector.
Mega logistics
Mega distribution warehouses are large scale modern distribution units, typically greater than 500,000 sq ft and located close to major arterial routes. Our exposure to mega logistics has fallen from £0.5 billion in 2017 to £0.3 billion today following the disposal of several warehouses, with the sale proceeds recycled into higher growth urban logistics.
Regional logistics
Regional logistics warehouses are mainly mid size units serving as regional hubs and creating the connecting link in any modern supply chain. Our regional logistics exposure has grown from £0.3 billion in 2017 to £0.7 billion today.
Case study
Our Bedford Link investment
Our flagship logistics asset in Bedford which was completed in 2022
Market drivers
The logistics sector continues to see structural tailwinds from continued online sales growth, investment in more efficient and resilient supply chains and increased warehouse automation.
Take up of logistics warehousing over 2024 was in line with the prior year at around 20 million sq ft. Whilst logistics vacancy rate has increased to 6%, speculative supply is falling and take up has remained healthy.
We continue to believe that urban logistics remains the most attractive sub-sector with the strongest rental growth, due to highly constrained supply and greater granularity of demand.
+ 7 % p.a.
Prime logistics rental growth in 2024