Market Insight

Build it and they will come – the message for Thames Valley logistics / industrial landlords in 2023

Whilst 2023 is expected to be slightly more muted compared with the last couple of years, the fundamentals for the industrial and logistics market in the Thames Valley remain robust for 2023, as industrial agent, James Newton explores.
January 10, 2023
Inside an industrial warehouse for rent, with overhead gantry.

Occupier demand for high-quality industrial and logistics premises boasting a good range of green credentials will remain but so too will restricted supply across the Thames Valley.

This, together with rising build costs and lower yields, is likely to push rents on further in 2023, as landlords seek to deliver meaningful stock to answer demand.

With this in mind, 2023 won’t be as easy a year for the industrial market – the already witnessed yield movement and construction costs will bring into question development viability, reducing confidence in speculative development.

But there is an opportunity for landlords to achieve a good return on investment in this market, which will continue to perform better than many other sectors in 2023 – just perhaps not quite at the growth rates we’ve seen in the last 12 months.

We predict that rents will continue to rise in 2023. Whether it be refurbishment of existing stock or the delivery of high-quality new stock to market, the specification needs to be market leading.

The demand is certainly there from occupiers, provided units provide the right specification and Environmental, Social and Governance (ESG) credentials.

What is our message to landlords in 2023, sometimes, fortune favours the brave and if you build it, our experience on the ground with occupiers here, tells us that they will come.

But where do the opportunities lie for landlords, investors and developers in the Thames Valley this year?


Reading represents a market with, in some sense, untapped potential.

It is still considered to be cheap in rental terms when compared with other key industrial locations in the Thames Valley, with secured rents sitting at around £13.50 psf on refurbished space.

Why is Reading discounted? Frankly, it needs more high spec industrial supply on the ground in and around the Reading area to answer to occupier demand.

However, one of the core challenges here is the fragmented ownership of land in the area, and this makes development land opportunities more challenging – creating the perfect supply storm.

There are some good quality schemes in the pipeline, including Reading International Logistics Park . The scheme, which is being delivered on a pre-let basis, needs to be built speculatively.

Another scheme is Delancey’s on Bennet Road where planning is going in for a circa 45,000 sq ft industrial unit. These schemes have the potential to create new market leading rents.


Slough remains the preeminent industrial location in the Thames Valley thanks to the quality of product available here, together with its location and connectivity.

In H1 2023, we expect to continual rental growth which will raise the bar to the mid-£20s, as competition between data centre occupiers and traditional industrial, continues.

Such is the competition from data centres here, that it is constraining land supply for industrial use.

However, unlike Reading, Slough does not suffer the complications of fragmented land ownership, making assembly for industrial development a much more straightforward process thanks to large parts of the existing stock being under single ownership.


Bracknell is only to be beaten by Slough in terms of rents being achieved. The success of Bracknell is testimony to the delivery of new, well specified speculative developments such as Segro Park and West Point.

At the turn of the year, we saw a new prime rent of £15.50 psf at Eastern Road, following a letting to DX Mail logistics on a 10-year term. This was on existing refurbished space and new build would be expected to achieve higher.

Competing demand for single units ought to give landlords and developers confidence in the ability for new build development to push rents on even further here in 2023 given the current demand / supply issue in the market.

The signs look promising for Kier’s new 100,000 sq ft warehouse at Logistics City with rents expected to come through in the high teens.

Theale / Thatcham / West Reading

With the long-awaited Panattoni site at Theale expected to be speculatively built, subject to planning, rents here will rise substantially as new schemes dramatically adjust the rental tone.

We are confident new record rents will be set when schemes are built given supply is at an all-time low, and this will continue to drop with strong occupational demand predicted to continue in 2023, despite the current market uncertainties.

Meanwhile in Newbury / Thatcham, we are already seeing signs of new prime rents being set with lettings in the pipeline. This market has only recently reached double digit rents, demonstrating how fast values can rise on new build stock, even in secondary industrial locations.

Opportunities exist for the shrewd landlord

We understand that land values have fallen, yields have compressed, and construction costs are putting pressure on new development. However, there are opportunities for the shrewd landlord / investor / developer in 2023.

The Thames Valley industrial market is still moving at a fast pace, with occupiers requiring buildings as soon as possible, but they should expect to see rents rise in 2023, subject to the supply of market leading developments and refurbishments.

Our full-service property experts know the Thames Valley industrial market inside out and can provide the strategic insight necessary to inform investment decisions – from development viability and planning expertise to asset management and subsequent industrial and logistics lettings.