Another warning over ‘big sheds’ shortage

Demand for logistics and industrial space across the North West could outstrip supply in 2017, according to real estate agent Knight Frank.

Rob Taylor, who leads its industrial agency team, said there is currently 2.2 million sq ft of space under construction or due for completion in the region, but that is less than six months’ supply.

The Knight Frank report follows a similar revelation by Savills last week that the region is approaching a severe shortage of new industrial sheds, with just 1.4 million sq ft of speculative Grade A space left.

Knight Frank’s latest data report reveals that the second half of 2016 saw a surge of interest with take-up of units more than 50,000 sq ft totalling 2.3 million sq ft – a 10% increase on the same period in 2015.

Almost half the take up was for brand new space.

Speculative schemes such as DB Symmetry’s M6 Epic (111,000 sq ft) and Harbert’s T1 Trafford Point (140,000 sq ft) scheme have both been let and there is continued occupier demand for speculative development in key distribution locations across the region.

There has been a corresponding rental growth with the £6.00 per sq ft mark reached at Trafford Park with the letting of T1 Trafford Point to SIG and surpassed at Heywood Distribution Park with the letting of H1 Heywood Distribution Park to Moran Logistics.

Taylor said: “Right now, there is 2.2 million sq ft of space under construction or due for completion in the region, which is less than six months’ supply.

“With almost half of this understood to be under offer it could once again lead to supply constraints over the coming year.

“We anticipate further rental growth on new build space, which will have a knock on effect on good quality second hand space in the region.

 “While take up for H2 2016 has been very much driven by leasehold transactions, we are starting to see demand increase from owner occupiers, who are finding it difficult to secure the right premises to satisfy their requirements.”