Record-breaking first half for East Mids industrial market
Industrial take-up in the East Midlands reached 4.01m sq ft in the first half of 2018, according to Savills latest Big Shed Briefing, just 200,000 sq ft less than whole of 2017 and 146% higher than the long term H1 average.
Among the most notable transactions were four build-to-suit deals totalling almost 2m sq ft at SEGRO’s East Midlands Gateway, including a pre-let to logistics company Kuehne + Nagel.
The firm reports that industrial supply in the East Midlands, which currently stands at 4.19m sq ft, has been stable for much of the last three years. However, the quality of available space has improved dramatically with 61% of stock in the market now classified as Grade A compared to 17% in Q3 2015. There is a further 2.35m sq ft of new space under construction across nine units, averaging 261,000 sq ft.
Average industrial unit sizes are also increasing in the region as developers respond to occupier requirements for larger space. The 411,613 sq ft Quantum at Magna Park is the largest currently available. The proportion of ‘smaller’ units between 100,000 sq ft and 200,000 sq ft on the market has also decreased from 69% at the start of 2015 to 29% in Q2 2018.
Charles Spicer, industrial director at Savills Birmingham, said: “The East Midlands is experiencing sustained occupier demand for industrial space. We continue to see rents rise and, with more growth forecast, the historic rental gap with the West Midlands is starting to narrow.”
