Significant recovery in industrial activity
THE region has seen significant recovery in industrial occupier activity, with just above three million sq ft taken in H1 2015, accounting for 18% of the national take-up in the first half of the year.
Knight Frank’s new LOGIC report says the increase was mainly due to a significant rise in occupier-led enquiries, which emerged towards the end of 2014, reflecting the improvement in the overall economic environment.
Two of the largest leasing deals in H1 came from Liverpool-based B&M, one of the country’s fastest growing discount retailers.
The company took 343,312sq ft at the Onyx350 building in Runcorn and secured 436,115sq ft at the ‘Midpoint 460’ unit in Middlewich in Cheshire by way of a sub-lease from Tesco, which is the main tenant.
A number of ‘design and build’ transactions were also agreed in H1, including Nice-Pak, which agreed to take a new lease at Westwood Park (400,000sq ft) in Wigan, while Culina Logistics secured a 280,000sq ft warehouse at Peel’s Port Salford Development.
Rob Taylor, head of Knight Frank’s North West Industrial team said: “Design and build opportunities will continue to become more prevalent as the market sees more occupiers agreeing to long-term leases. In addition to this, we will see a number of units over 100,000 sq ft being built over the next 12 months.”
There is more than 1 million sq ft under construction, which will come as a boost to the region following a period of limited development. Units currently under construction include the 250,000sq ft distribution warehouse at Trafford Park, which has been pre-let to Norbert Dentressangle on a 15-year lease and is due to be completed by March 2016.
Speculative developments well underway or nearing completion include Evander’s 185,191 sq ft unit at Revolution in Chorley and the 110,000 sq ft industrial unit being built by DB Symmetry at M6 Epic, which is due to complete in Q4 2015.
In the UK industrial investment market, just under £3bn of industrial assets change hands in the first half of the year, which is relatively subdued compared with the record £4.2bn achieved in H2 2014.
