What are multi-let industrial (MLI) assets?

Located near urban areas and generally easily accessible to transport links, MLI estates lease between 5 and 50 industrial units of different sizes, providing affordable space for a wide range of business activities.

They are mostly let to a highly diversified range of SMEs on three to five-year leases, with units usually ranging from 500 sq ft to 10,000 sq ft in size.

Increasing demand

  1. The growing number of SME businesses
  2. Conveniently located flexible space for online retail and logistics
  3. Gentrification works on industrial estates, too
  4. Working practices are changing

Gap between supply and demand is driving strong rental growth in MLI, opening the opportunity for superior returns

Low supply

  1. New development in attractive locations isn't commercially viable
  2. "They're not making land any more"
  3. Most appropriate land supply is prioritised for residential use

Why MLI in the UK?

Demand outweighs supply - a market imbalance that's likely to remain for the foreseeable future, causing strong growth in rents.

A structural shift in demand for MLI units has taken place and primarily driven by eCommerce and a growing number of SME businesses in the UK. These long-term trends have accelerated by the coronavirus pandemic whilst supply remains inelastic due to lack of available land and high construction costs.

The demand/supply imbalance is leading to sustained rental growth of 4-5% per annum in the MLI sector. Despite this, rents remain highly affordable, with most occupiers only spending 2-3% of their annual turnover on rent.

The power of demand

Whilst industrial property has historically out-performed offices and retail, we are current experiencing a structural shift in ongoing and long-term demand for flexible industrial space in densely populated urban areas, for a variety of reasons:

The constraints of supply

Creating new MLI accommodation in densely populated urban areas is difficult, and therefore rare, for several reasons:

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