East Mids Gateway drives logistics space take-up
Demand for UK logistics space continues to be resilient with the first quarter of 2018 being the strongest for the past three years, according to research from Cushman & Wakefield.
Total take-up of logistics space in the first three months of 2018 climbed to 10.2m sq ft, outpacing the same quarter last year by 60%. The purpose-built share of the market was especially strong indicating that many occupiers are looking beyond Brexit and taking longer-term commitments.
In the first quarter, purpose-built deals accounted for 35% of the total number of transactions and 67% of total take-up (by sq ft). Retailers (including eRetailers) took the lead over manufacturers during the first quarter, accounting for 57% of take-up.
UK omni-retailers have been busy ensuring their portfolios support the changing nature of their businesses as online sales account for an increasing share of total turnover. M&S’s decision to close its Neasden site in North-West London to open a new 495,000 sq ft distribution centre north of the M25 is an example of this type of restructuring. Meanwhile, H&M plans to consolidate eFulfilment activities in a new 750,000 sq ft purpose-built facility in Milton Keyes later this year.
The research also shows that take-up by pure online players is on the rise, accounting for 24% of total retailer take-up in the first quarter. After a pause in its network expansion at the end of last year, Amazon resumed its growth plans to sign a 500,000 sq ft purpose built deal at East Midlands Gateway Park.
With Shop Direct taking another 550,000 sq ft, East Midlands Gateway ended the quarter accounting for 78% of total pure player take-up.
Gemma Constantinou, associate, logistics & industrial agency, Cushman & Wakefield which covers the East Midlands, said: “The East Midlands has maintained the momentum of attracting Etailers to the region. The success of SLP East Midlands Gateway, with three deals agreed before final completion of infrastructure works, demonstrates how well connected sites remain in high demand and in focus.”
