Record set for industrial space take-up
THE Midlands set a record for take-up of large industrial and logistics space, achieving 80% of 2015’s total in the first six months of this year.
However that success has impacted on available supply of big sheds with just 1.92m sq ft ready and a further 1.87m under construction
Richard Meering, head of CBRE’s logistics and industrial agency team in Birmingham said: “At the current level of take-up we have less than six months worth of supply, and in parallel to the low levels of grade A stock there is a significant scarcity of oven ready sites across the Midlands with planning consent that can accommodate large bespoke distribution units. There’s a real danger we will lose occupiers to other parts of the country.
Data from CBRE has shown 5.61m sq ft of space was let across the region in the period January to June, split about 55:45 in East Midlands’ favour.
The figures reflect take-up in the 100,000 sq ft-plus market and represents more than 40% of the country’s overall take-up.
“The Midlands is the Mayfair of sheds,” said Mr Meering. “It is home to the country’s biggest warehousing units and the epicentre of its distribution network. This is reflected in the record levels of take-up we have seen so far this year and the consistent levels of commitment to the region.”
Among the major deals completed were Jaguar Land Rover’s 468,955 sq ft across two units at Prologis Park in Ryton, Ted Baker’s acquisition of 325,000 sq ft at Angle 325 at Derby Commercial Park, and Boden’s pre-letting of 275,220 sq ft at Optimus Point in Leicester.
The busy first half has significantly reduced the available stock. CBRE said more than half of the recently-completed large units, which total 1.92m sq ft, that were built speculatively are either under offer or the subject of strong occupier interest.
There is a further 1.87m sq ft of space currently under construction.
Mr Meering said: “Over the last few years average void periods for speculatively built stock have shrunk to low levels, removing much of the risk associated with building without a pre-let.
“Rents on prime sites have now reached £6.50 per sq ft, reflecting high levels of demand. What’s more, despite concerns over the impact of Brexit, occupier demand since the vote has remained encouragingly strong with good level of new enquiries and significant further pre-lets in solicitors hands.”
