Jo Jackson, SEGRO: Land remains in strong demand across the Thames Valley with a number of sites going for data centre use

The Thames Valley Property Awards 2021, organised by The Business Magazine, brings together the cream of professional talent among the agents, developers, planners, consultants, property lawyers, and dealmakers in the region. The event could not take place without the support of sponsors, such as SEGRO, a property investment and development company. We spoke with Jo Jackson, Director at Segro, on the company's decision to be involved in picking the best of the best in the region, what it is one should look for in a winner for the Thames Valley Property Awards, and what the general trends in the sector are.

What motivated you, as a company, to sponsor the Thames Valley Property Awards and more specifically the Industrial/Logistics Consultancy of the Year?

Jo Jackson: The Awards bring together the cream of the region’s property agents, developers and advisors to celebrate the impressive achievements over the past 12 months.  As a major investor in Thames Valley and with Slough Trading Estate at the heart of the region’s property market, we have been long-standing supporters of the awards and have been proud winners of a number of categories in recent years. We’re delighted to be sponsoring this year’s Industrial/Logistics Consultancy of the Year, which is sure to be a hotly contested category.

What does it take to be the team that wins the Industrial/Logistics Consultancy of the Year?

Jo Jackson: It is no secret that the Industrial & Logistics market is booming, it is such an exciting, dynamic market and the consultancy landscape is extremely competitive. The winning consultancy team will no doubt demonstrate incredible market knowledge, keen insight and understanding of the demands of developers, landlords and, importantly, occupiers, while of course showcasing a strong portfolio of clients and projects, and a track record of transactions they have advised on.

How have Brexit and the pandemic affected the completion of industrial/logistics deals in the Thames Valley region? 

Jo Jackson: As would be expected, the first half of 2020 was a lot slower and was impacted by the pandemic, but the second half of 2020 saw a very strong bounce-back. However, take-up levels were down in 2019. 2021 has started strong and will potentially be a record-breaking year with significant occupational demand across all size brackets, and now very limited supply in the region.

How did you, as a firm, navigate the challenges the pandemic posed to your sector during this financial year?

Jo Jackson: As we all know, the pandemic posed unprecedented challenges although our sector has demonstrated incredible resilience. Our strong culture, operational structure and close relationships with our customers put us in a strong position to navigate the challenges and we had a successful year. We are particularly proud of what we achieved in our local communities as well as our development pipeline (we completed 47 projects on schedule across the UK and Europe despite coronavirus restrictions), leasing track record and overall delivery for our shareholders.  In our Centenary Year, we distributed £1.5 million to community and charity projects, helping those in distress due to COVID-19, while launching our Responsible SEGRO initiative, pledging to make the company net zero carbon by 2030. 

What have been the overall financial trends in your sector in the Thames Valley region this year? How have they differed from the previous year and what are your expectations for 2022/2023?

Jo Jackson: The region is seeing significant rental growth which we have seen in our financial results for the first half of 2021. We are continuing to see significant occupational interest across our Thames Valley assets and have completed a number of new leases since the start of the year. This has significantly reduced our vacancy rates down to c.2% which are at historic low levels, something shared across the industrial / logistics sector throughout the UK. With supply likely to remain tight and occupational demand to continue, we expect rental growth to continue into 2022 and 2023.

The investment market continues to be very competitive with limited stock coming to the market, particularly in the Thames Valley, and where assets are marketed, they are generating significant interest with yields at record-low levels. Prime South-East yields for multi-let industrial are in the region of 3.75%. Both rental growth and yield compression are leading to continued increases in capital values across the sector. Land remains in strong demand across the Thames Valley with a number of sites going for data centre use, increasing the pressure on industrial supply, and increasing land value.