Nationwide overview

25 January 2018, by Richard Sullivan

The fact that supply levels and vacancy rates have remained reasonably consistent for the last four years despite take-up volatility points to a market which is largely in equilibrium


Given the record levels of take-up achieved in 2016 and the amount of space taken by Amazon, 2017 was always going to struggle to keep pace.

Little clarity has emerged from the Brexit negotiations on what our future trading relationship with the EU will look like. Manufacturers and retailers will be waiting with interest as the implications for global supply chains will be vast and certainly impact the amount of inventory potentially stored in the UK.

Non property factors are rising up the priority list for occupiers' locational decisions, in particular the availability of labour and energy.

This will mean more evolution of the market and whilst core locations such as the Golden Triangle will remain important there will be a blurring around the edges as occupiers continue to locate in peripheral locations.



▲ Tamworth 594 let by Logicor to XPO Logistics


■ At a nationwide level take-up has reached 24.46m sq ft for the year to date, a fall of 12.85m sq ft on 2016, but 2% higher than the 10 year average. By deal count, however, the picture is more pleasing, with 103 transactions completed, meaning for four years in a row there have been more than 100 deals.

■ In a sign of how much the market has evolved over recent years it should be noted that the long term average take-up level has increased from just over 17m sq ft in 2009 and now stands at 23.96m sq ft.

■ Of the 24.46m sq ft transacted in 2017 41% was in the Midlands, demonstrating that whilst the boundaries of the market are blurring the Golden Triangle retains its position as the prime market in the UK.


National take-up

Figure 1

Source: Savills Research

Supply and Pipeline

■ Total supply in the UK has risen 3.2m sq ft in 2017 to 28.63m sq ft. This has been driven in the most part by a slight increase in the number of speculative units reaching completion and now entering our supply statistics.

■ 4.4m sq ft of space is currently under construction and due for delivery in 2018.


Three-year rolling average take-up

Figure 2

Source: Savills Research



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