Logistics sector take-up set to pick up in H2

AN absence in the first half of 2014 of major ‘big box warehouse design and build has contributed to a dramatic fall in 100,000 sq ft plus logistics deals in the region, according to data from CBRE.

While the market in the first half of 2013 was buoyant with 2.8m sq ft of take-up – mostly at the big sheds at Omega on the M62 at Warrington, there was just 373,000 sq fr of take up in the first six months of 2014, according to the property consultancy’s H1 Logistics Report.

Such a fall though, CBRE says, does not reflect strong levels of interest in the North West logistics sector from both occupiers and investors.

It says a number of major design and build deals are at “advanced levels of negotiation” on key development sites including 6-61 Bolton, EPIC Wigan and Airport City Manchester.

CBRE expects occupier activity to improve into the second half, as the success in 2013 at sites such as Omega in Warrington looks set to encourage developers to consider speculative development. At present, all the speculative schemes in the North West are smaller units of less than 100,000 sq ft.

Assessing the regional picture Mike Walker, senior director of industrial agency at CBRE Manchester, said the North West logistics sector is benefitting from investment in infrastructure over the last five years, which will set the foundations for future growth.

“Such initiatives include the funding put in place via the North West Evergreen Fund for access roads, ground works, power, drainage and other utilities at the Logistics North site near Bolton. In addition Peel is well underway with its enhancements to the region’s port facilities. Liverpool 2 will provide new deep water port facilities, allowing larger vessels to dock at Liverpool.

“These facilities are due to open in the second half of 2015.  In addition there are new facilities planned at Port Salford as part of an enhancement of the Manchester Ship Canal.

“These investments are expected to have a medium term impact on demand, particularly in markets to the west of Manchester. Lack of developable land immediately adjacent to the new port will create a bubble effect and offset demand to other North West locations.”