Jaguar letting drives historic high for industrial take up
Take up of industrial units hit an all-time high in the Midlands with 13.3million sq ft of space let during 2019, 45% of all UK transactions.
According to Colliers International’s latest annual Industrial and Logistics report, the largest deal of the year saw Jaguar Land Rover, advised by Colliers International, agree to lease five design and build units at Appleby Magna, totalling 2.94 million sq ft. This is the biggest pre-let in history and supports the appetite for the M42 supply corridor.
Other key significant deals included VF Corporation’s pre-let of 578,620 sq ft at Unit 1 Mountpark Bardon, Urban Outfitters commitment to building a 432,000 sq ft bespoke unit at Peterborough Gateway and IAC agreed two lets of 77,484 sq ft and 233,085 sq ft at Prologis Park Birmingham Interchange in Solihull on a 11-year lease for rents of £7.25 per sq ft and £6.65 per sq ft.
Simon Norton, director of industrial and logistics for the Birmingham office of Colliers International, said: “We’ve just had a record year of letting activity in the Midlands, with 45 per cent of all UK Industrial transactions taking place in the region. We’ve had interest from both national and international occupiers and the area is ideal for larger scale units, which can distribute goods easily across the country.
“We expect this year that interest will grow, as occupiers continue to streamline their logistics models and the speculative developments will be quickly snapped up.”
Despite the Brexit wobbles, investment volumes recorded the second best turn over on record, behind 2018’s high of £1.5billion. Prime yields are ranging between 4.25 per cent to 4.50 per cent.
Andrea Ferranti, head of industrial and logistics research at Colliers added: “Typically over the last three years, we’ve seen the return of mega boxes as retailers look to capitalise on ecommerce and larger scale lets as occupiers try to make use of economies of scale.
“Colliers predicts that over the next 12 months, we’re going to see a release of pent up demand in the UK which could see total take-up close to the record-breaking activity of 34.6m sq ft witnessed in 2018.”