Costs keep industrial occupiers cautious in Q3, JLL says

Capital values and rental rates remained flat despite steady demand.

Demand for high-specification logistics held firm in the third quarter, but occupiers remained cautious amidst persistent cost pressures, according to JLL’s industrial market dynamics report.

Capital values remained flat, with rental rates holding steady amidst cautious market sentiment, resulting in stable yields.

Only a limited number of major buildings were completed, whilst future pipeline activity gained traction with announcements of upcoming facilities.

Demand for quality premises should remain resilient over the next 12 months, but unresolved geopolitical conflicts and heightened occupier cost sensitivity could keep rental growth modest, JLL said.

Strong investor appetite for premium assets is expected to drive capital value growth ahead of rents starting in 2027, leading to moderate yield compression.

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