Savvy buy-to-let investors faced with dwindling returns in the residential sector are turning to warehouses as this year’s big business opportunity.
Rightmove has reported a record number of calls about the industrial and warehouse property sector in 2021, with total enquiries on freehold properties up 108% in the first three weeks of January compared to the same period in 2020 and total enquiries on leasehold properties up 38%.
Encouraged by the boom in online retail sales, in December the number of enquiries about warehouses outperformed all other sectors, reports Rightmove; the number of people enquiring about buying a premises was up 56% last month on December 2019, while the number enquiring about a lease was up 43%.
The majority of freehold enquiries were in the South East (+85%), London (+84%) and the East Midlands (+77%).
Alex Solomon, director of Rightmove’s commercial real estate portal (pictured), says there’s been a greater need for warehouses of all sizes to respond to the increased demand from people shopping online, which has led to demand in the industrial and warehousing sector going into overdrive.
He explains: “Agents are reporting an extremely high conversion rate from businesses enquiring for warehouse space, with new leases being agreed quickly.
“While enquiries for retail outlets are still higher than before the pandemic, the rate of conversion is slower, suggesting people are considering a relocation to another outlet or starting up a new business, but until there is more certainty around when non-essential retailers can open again this pace is likely to remain much slower than that of industrial spaces.”