Property and the implications of the Government’s proposed reforms for warehousing, have been a major focus for us this season. During the Labour Party Conference, we convened a special lunchtime meeting of UKWA’s Property & Planning Advisory Board, chaired by Ian Henderson (UKWA Vice Chair and Group Head of Property at ABP) and attended by Mike Reader MP, chair of the All-Party Parliamentary Group on Infrastructure. Senior UKWA representatives, major logistics companies, developers and port operators discussed what the Industrial & Logistics sector needs from policymakers.
Savills subsequently sponsored our annual House of Lords Luncheon last month and hosted a roundtable meeting that same morning. Entitled “Navigating the New Normal – Cost Pressures, Lease Reform & the Future of Industrial Occupancy,” the conversation brought together leading occupiers. Once again, Business Rates, the pace of Planning Reform, and the proposed ban on Upward-Only Rent Review clauses in the English Devolution and Community Empowerment Bill emerged as critical concerns.
At first glance, prohibiting upward-only rent reviews in new commercial leases in England and Wales could look like a move that will cut costs for UKWA members, who are usually tenants of the properties they occupy. The policy is primarily aimed at retail but would apply across other sectors by default and is expected to be grafted onto the Landlord and Tenant Act 1954 framework. The Bill targets clauses that prevent rents ever moving down (including market reviews with collars/floors). While upward-only language is common in warehouse leases and appears to favour landlords, removing this downside protection will have knock-on effects on tenants too.
The Government has framed the move as support for small businesses facing high street rents. Yet with warehousing accounting for more than a third of UK commercial floorspace, the impact would extend far beyond retail. In logistics, where long leases often underpin funding and development, the future prospect of rents going down will simply be priced in by landlords and lenders. Likely responses include higher initial rents, shorter lease terms, more frequent breaks, tighter covenants and fewer upfront incentives, particularly for new or single-site operators. The rhetoric may sound positive at face value, but it is hard to see who really benefits here.
Crucially, the changes do nothing to increase warehouse supply. If forward-funded schemes become harder to underwrite, new development could slow, pushing up occupancy costs and constraining growth. This concern is already surfacing among major investors, especially since the industrial sector is notably more exposed to institutional capital than retail.
In short, a one-size-fits-all ban risks unintended collateral damage to a sector central to the UK’s productivity, exports and resilience. We urge the Government to rethink its approach and work with our sector on targeted, evidence-led reform that protects investment and keeps the economy growing.
Clare Bottle
UKWA, CEO
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