A weak economic outlook, increased efficiency of new buildings and worsening affordability are all weighing on demand for industrial assets, which has fallen to a 15-year low according to RICS. That supports our view that industrial rental growth will slow from 5% y/y in Q3 2025 to 2.8% y/y by end-27. Combined with a low income return, that means industrial total returns will average just over 7% p.a. over 2026-29, lower than all other major sectors bar offices.
Become a client to read more
This is premium content that requires an active Capital Economics subscription to view.
Already have an account?
You may already have access to this premium content as part of a paid subscription.
Sign in to read the content in full or get details of how you can access it
Register for free
Sign up for a free account to:
- Unlock additional content
- Register for Capital Economics events
- Receive email updates and economist-curated newsletters
- Request a free trial of our services