Does the city level have any meaning in real estate allocation? Taking a look at the MSCI local data for industrial rental growth over the 41 years from 1980 to 2021, the London Borough of Newham tops the rankings with compound growth in market rents of 6.2% pa. A stunning 167 bps pa ahead of the 45 other boroughs with such a long performance history.

So why Newham? Firstly, eight of the nine highest ranking industrial locations for rental value growth since 1980 are either in inner, or outer London. The exception is Harlow, in Essex and many West Ham fans will know that Newham was also classified as Essex until 1965. Harlow is interesting in itself as a ‘new town’, strategically placed on the M11 corridor which includes Cambridge and London Stansted airport. Newham also contains an airport, London City and was one of the six host boroughs for the 2012 Summer Olympics, containing most of the Olympic Park including the London Stadium.

The eastward expansion of London, the transport links and regeneration all seem to have benefitted industrial property owners over the past four decades. From an asset allocation perspective, was it about outer London or more localised? Is region too blunt a tool to segment the market? Would more granular spatial analysis of proximity to airports, motorways and households reveal the best allocation strategies?

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