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.
Gap between supply and demand is driving strong rental growth in MLI, opening the opportunity for superior returns
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.
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:
Creating new MLI accommodation in densely populated urban areas is difficult, and therefore rare, for several reasons:
Sign up to receive the latest information direct to your inbox