Total returns for modern logistics stock across the UK in H1 were 4.4%, outperforming all property collectively according to a newly launched CBRE benchmarking index.

The index, a first to focus exclusively on the modern warehousing property industry, revealed that despite returns being down from 8.9% in the second half of 2015, logistics outperformed the wider industrials sector and all UK property collectively, which saw returns of 3.6% and 3%respectively.

Logistics performance comprised 1.7% of capital growth and 2.7% of income return with the reduction in capital growth from 5.9% in H2 2015 attributed to changes in stamp duty.

Over the 12 months to the end of June, total returns in the logistics sector stood at 13.6%, with capital growth at 7.7%.

Rental value growth in the six months to June 2016 was 2.2%, unchanged from H2 2015 - the second fastest rate of rental growth recorded on the Index, which has been backdated to the start of 2010.

At a regional level, the highest returns in H1 2016 were seen in the North of England, where the total return was 6.9% while returns were also robust in the Midlands at 5.5%, with the lowest returns in the South East, at 3.2%.

Andrew Marston, director in CBRE’s UK Research team said: “With the launch of the ‘CBRE UK Logistics Index’ we can, for the first time, focus a spotlight on the performance of what is now a mature real estate asset class. The first Index confirms why the logistics sector has been such a popular choice amongst investors in recent years.

“Regardless of whether we look at a holding period of one, three or five years, logistics real estate has consistently outperformed both all property and all industrials in terms of total returns, capital growth and rental value growth. For example, the annualised total return for the three years to the end of June 2016 for logistics is 19.9%, compared to 11.3% for all industrials and just 8.8% for all property on the CBRE UK Logistics Index.”

CBRE’s index is comprised of repeat valuations of large, modern warehouse stock built since 2000, valued by CBRE, and owned by some of the leading investors in the UK logistics sector. The data for H1 2016 is based on the collective performance of 280 individual assets, with a combined capital value of £8.22bn at the end of June 2016.

The next update of the CBRE Logistics Index will be released in January/February of 2017 and will report in full performance over the second half of 2016.