Yorkshire sees speculative development increase despite Brexit worries
As a result of Brexit uncertainty, industrial take-up across the UK for the first quarter in 2019 has measured as the lowest Q1 reading since 2013 – but Yorkshire has bucked the trend.
The Spring 2019 Industrial & Logistics Barometer, published by Colliers International, shows that national ‘Big Box’ take-up (100,000+ sq ft) slowed to 4.9m sq ft in the first quarter of 2019.
However, although national take-up is at its lowest reading since 2013, in Yorkshire there has been an increase in speculative development. Significant deals in the region include the recent 731,000 sq ft warehouse iPort letting in Doncaster.
Colliers International’s industrial and logistics specialist in the Yorkshire market, Rob Whatmuff, predicts that full year take-up figures will still be in line with the 10-year average.
Whatmuff said: “Despite the fall in take-up nationally, 2019 is seeing an increase in speculative development within the Yorkshire market from 2018. In addition, the political and trade uncertainties have not deterred good demand in the region for newly completed speculative product, as well as that which is currently under construction.
“We are confident that the retail/wholesale and 3PL sectors will continue to drive the market take-up in prime locations as we move into Q2 and Q3 2019. Indeed, with Colliers recently advising Verdion on another 731,000 sq ft mega-warehouse deal to a major online retailer at iPort in Doncaster, things look set to pick up as we progress into the year.”
Andrea Ferranti, head of industrial and logistics research at Colliers International, added: “We are confident that, once occupier confidence returns and investment decisions are implemented by those retailers executing their online strategy, pent-up demand will produce a bumper year for take-up in 2020.”
2019’s scheduled completions will total around 10.8 million sq ft, up 55% on the total space completed in 2018.
Speculative delivery in the 18-month period up to the end of Q1 2019 saw the completion of 8.5 million sq ft of warehouse space. Despite this, the supply/demand balance has remained healthy with around 31 million sq ft of readily available distribution warehouse currently available, up only 4.6% on Q1 2018.
Len Rosso, head of industrial and logistics at Colliers International, said: “Looking ahead, requirements by occupiers to bolster operational efficiency and reap the benefits of growing e-commerce demand will support the market this year. We fully expect this to translate into steady take-up in 2019, in line with the 10-year average, and a stand-out year in 2020.”
