Segro and other UK warehouse developers suffered from plunging valuations last year, ending a decade-long boom for the asset class brought on by investor excitement around the role of warehouses in the rise of online shopping — a phenomenon turbocharged by the pandemic. The admission from Amazon, a key ecommerce warehouse tenant, that it had overexpanded in May last year was the initial cause of the warehouse value slide. This was followed by the “mini” Budget in September, which caused those values to slump further as yield on government debt briefly overtook UK warehouses’ average rental yield and higher interest rates reduced buyers’ budgets.

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