East Midlands records highest logistics property take-up in Q2
The East Midlands industrial and logistics property sector recorded one of the highest levels of take-up in the UK during the second quarter of 2020.
Total take-up for the UK logistics market in Q2 was 12.78m sq ft, the highest quarter on record, of which 4m sq ft (31.8%) was in the East Midlands, according to the latest data from CBRE.
The South East recorded the second highest share of take-up, at 31.5 per cent, followed by Yorkshire and the North East, with 29.1 per cent.
Take-up in East Midlands was shared among 11 deals, including Amazon’s 550,000 sq ft letting at Panattoni Park, Nottingham, and Bleckmann’s 186,000 sq ft letting at Gazeley’s Tornado 186 unit at Magna Park, Lutterworth.
Across the UK, a total of 36 deals completed during Q2, a 33 per cent increase compared to Q2 2019, which saw 27 deals. The average unit size was larger at 355,133 sq ft, compared to 278,658 sq ft in Q2 2019.
Online retail continues to account for the largest proportion of take-up, at 43.8 per cent. Third-party logistics accounted for 15.3 per cent, general retail 13.9 per cent, food retail and the food industry 13.2 per cent, and post and parcels 9.2 per cent.
Peter Monks, director and head of CBRE’s industrial and logistics team in the Midlands, said: “The logistics sector has gone from strength to strength through some testing times for the wider market. A large increase in online retail spending has been a key driver in the demand spike, particularly in the East Midlands, which has long been regarded as the traditional heartland of the logistics sector.
“As a result of a shift in consumer shopping habits, brought about by the lockdown restrictions from Covid-19, we’re aware of a number of national occupiers currently reshaping the nature of their warehouse representation and supply chain operations.
“As such, we expect appetite for logistics and warehouse space to remain strong for the foreseeable future.”
According to CBRE’s research, across the UK short term ‘Covid’ related deals for 12-month lease terms (or less) accounted for 22.2% by number of deals and 15.5% by floor space. Despite speculation that take-up would be heavily weighted towards the short-term Covid deals, this has not come to fruition.