Region leads the way in UK’s Big Box League
THE East Midlands led the UK’s industrial and logistics market in the first half of 2016, according to the latest Big Box analysis by property agent JLL.
Its researchers studied demand for new Grade A industrial space in units of 100,000 sq ft and above, which is regarded as a bellwether for the distribution sector.
The East Midlands mopped up 26% of the lettings in England, Wales and Scotland, the largest percentage in the UK with the South West just behind on 25%.
James Keeton, JLL’s director, said: “Significantly, each of those regions secured a letting of at least a million sq ft in H1; Amazon took 1.05m sq ft at Mountpark Bardon, which is due to complete in October, and The Range signed for 1.158m sq ft at Avonmouth’s Central Park.”
Other notable deals in the East Midlands include the completion of 480,000 sq ft for Great Bear at the ever successful Markham Vale, J.29a M1.
Keeton said: “The largest Big Box investment deal also happened in the East Midlands, when BNP Paribas REIM paid in the region of £120m for the Amazon distribution centre on behalf of a Korean investor.
“Retailers continued to drive demand for space, and the trend is now very marked for them to either open new fulfilment centres, or to consolidate existing distribution facilities into larger centres to increase productivity.
“We’re also seeing a strengthening of demand for Build to Suit space because e-tail tenants have very specific requirements, and I’d expect that to continue once the market settles down.”
The JLL analysis indicates that the amount of new space reaching the market remains well below its pre-recession peak, hinting at potential supply issues ahead.
However, Keeton thinks the Midlands is well placed to cope, pointing to the number of speculative developments under construction in the region. There are 23 Big Box schemes under way across the country, which would deliver another 4.6m sq ft. Nine of these are in our region, delivering a good supply of immediately, or soon to come to market space, able to capture demand.
