The UK logistics sector provided investors with a total return of 19.6% in the year to June 2015, a slight decline on the previous 12-month period, according to MSCI’s IPD UK Logistics Investment Report.
The report, sponsored by BNP Paribas Real Estate, found industrial returns significantly outmatched the 15.6% registered for the overall UK market.
It said the performance had been driven by the exponential growth of online retailing and the resultant boom in demand from retailers for distribution hubs with good transport links.
BNP PRE found that £2.6bn was invested in the sector last year, up by 87% on the long-term average, while rents rose by 4.6% over the past two years.
The average yields on industrial buildings sold for more than £20m fell by 112 bps to 5.38%.
Colm Lauder, senior associate at MSCI, said: “The fallback in returns can largely be explained by the fact that this sector of the market was among the earliest to show signs of recovery with gains in capital value emerging earlier than in the broader property market.
“Subsequently, the logistics sector has stabilised in line with long-term trends.”
