Strong demand sees industrial take-up set new H1 record

Industrial take up in the West Midlands enjoyed its strongest first half on record, according to new figures.

According to Savills’ latest Big Shed Briefing, take up reached 4 million sq ft (371,600 sq m) in the first half of this year – 58% higher than the same period last year (2.57 million sq ft) and 95% higher than the long term average (2.08 million sq ft / 193,232 sq m).

Savills said developers had responded to the previous chronic lack of industrial stock in the West Midlands, with available space increasing 16% since the end of 2016.

There is currently 3.5 million sq ft (325,150 sq m) of industrial space on the market in the region, of which 58% is classified as Grade A.  This includes seven speculatively developed industrial units totalling 1.5 million sq ft (139,350 sq m), of which the largest is the 372,000 sq ft M6DC at Kingswood Lakeside in Cannock (34,558 sq m).

Despite these levels of speculative development, the report highlights ongoing demand for build-to-suit industrial units, with 1.7 million sq ft (157,930 sq m) of the latter transacted in the West Midlands in H1 2017.  This equates to 42% of total take up for the period.  With only three units over 200,000 sq ft (18,580 sq m) available, Savills said build-to-suit had proved the only viable option for industrial occupiers with large requirements.

The automotive sector was the most active in the West Midlands in the first half of this year, accounting for 46% of total H1 take up.  Jaguar Land Rover, Michelin and Polytec are among the most active automotive occupiers in the region.

Ranjit Gill, industrial director at Savills Birmingham, said: “With industrial take up in the West Midlands already eclipsing the annual long term average, it is clear there is strong occupier demand for the right product in the right location.

“The region has a development pipeline of approximately 740,000 sq ft under construction, however all of these units are less than 200,000 sq ft.  As such, there is certainly an opportunity for owners of well-positioned sites to build larger units and cater for this demand.”