Midlands leads UK for industrial and logistics take-up
The Midlands scored the largest take-up of industrial and logistics property in the UK in the second half of 2016, according to latest research from property consultancy Knight Frank.
The firm’s newly published Logistics and Industrial Market Report reveals that the region accounted for 38% of total take-up (8.2m sq ft) in the period July-December 2016. London and the South East trailed with 22% (4.77m sq ft) while the North West racked up just 11% (2.38m sq ft).
The industrial and logistics sector shrugged off Brexit, with occupational activity across the UK increasing by 34% on H1 2016.
In the Midlands, take-up outpaced the national average, up 36% (8.2m sq ft) on the previous six months. Take up for the year, at 14.3m sq ft, rose 18% on 2015 and was 23% ahead of the five-year average of 11.6m sq ft.
The largest transaction in the region during this period was the 562,000 sq ft letting to Screwfix at ProLogis Park, Fradley. The pre-let of 543,000 sq ft to Gestamp Tallent at Bericote Properties’ Four Ashes, Wolverhampton was a near second.
Distributors were responsible for the lion’s share of take-up across the region in H2, accounting for 79%. This was apportioned between retailers (22% of total take-up), third party logistics operators (19%) and on-line retailers (17%).
Manufacturers took 20% of available space, with the automotive sector responsible for around half of that (9%), while 58% of space absorbed was pre-let or design and build; second-hand space accounted for 25% while 17% of take-up was new existing space.
Jon Ryan-Gill, partner and head of the industrial agency team at the Birmingham office of Knight Frank, said stock levels in the region remain perilously low.
He said: “We have just two months’ supply of new build stock available, and around four months’ of second hand space.
“Thankfully there is more speculative development coming through, with 2.1m sq ft already under construction by the close of 2016. A further 1.3m sq ft is planned for late 2017 and early 2018.”
He added that space constraints were pushing rents towards new highs of £7 per sq ft in prime locations.
Perhaps not surprisingly, investors continue to favour the sector.
