UK Logistics: 

Big Shed Briefing

Big Shed Briefing
Big Shed Briefing

19 July 2017, by Kevin Mofid

Subdued start compared to 2016, but in line with long-term trends

Summary

■ The huge levels of demand from online retailers seen in 2016 have not continued into 2017. However, the market is performing to long-term averages with 11.8m sq ft transacted in the first half of the year.

■ We view this more a 'pause for thought' as requirement levels remain robust and we expect a number of large requirements to be satisfied in the second half of the year.

 

■ The West Midlands, South West and the East of England have performed exceptionally well. All regions have seen above average levels of take-up.

■ Nationwide supply has risen by 1.5m sq ft since the turn of the year, and now stands at just over 28m sq ft. However, it should be noted that given the nature of the market this volatility should be expected as large units being developed speculatively, subsequently marketed and then occupied can easily skew reporting.

■ Investment volumes remain strong with £2.3bn deployed into the sector in 2017. The number of deals has fallen by a third, but a number of large capital investments and portfolio transactions have maintained the buoyant investor sentiment.

Main image: Lyons Park in Coventry where Goodman, advised by Savills, have leased a unit of 440,000 sq ft to a major online retailer

Articles from 'Big Shed Briefing – July 2017'

Nationwide overview

19 July 2017

Nationwide overview

With no sign of over development in the sector, the market is well positioned to ride out a short period of subdued occupier demand

London & The South East

Whilst there has been a paucity of transactional evidence in the first half of 2017, requirement levels are generally strong, meaning we expect a strong second half of the year, as was the case in 2016

East Midlands

19 July 2017

East Midlands

The fact that the East Midlands is well supplied with units across size ranges will put the market in good stead to capture more footloose requirements

West Midlands

19 July 2017

West Midlands

With take-up in the West Midlands already eclipsing the annual long term average it is clear there is occupier demand for the right product in the right location

North West

19 July 2017

North West

The North West has seen a slow start to the year, but transactional activity is continuing to pick up. We are therefore expecting a strong end to the year

Yorkshire & The Humber

19 July 2017

Yorkshire & The Humber

There has been a welcome increase in supply in the region in 2017 which will benefit occupiers who have put off decisions due to the lack of available units

South West

19 July 2017

South West

The South West remains a popular destination for occupiers, particularly those seeking land for large scale build to suit units

East of England

19 July 2017

East of England

Demand remains stable in the region as occupiers are attracted by cost effective rents along with the willingness of landowners to release parcels of freehold land

Scotland

17 July 2017

Scotland

The lack of Grade A supply is now critical in Scotland. Demand has been underwhelming for a variety of reasons but there is interest building and the challenge will the lack of supply suppressing the new demand

National investment

19 July 2017

National investment

Given the continued appetite of investors to deploy capital into the sector, and combined with strong competition for prime assets, there is potential for an inward yield shift in the second half of the 2017

Build Cost & Programme

19 July 2017

Build Cost & Programme

Build costs and programme delivery time scales have stabilised into 2017

Outlook

19 July 2017

Outlook

Demand to rise in second half of the year

 
 

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Key contacts

Kevin Mofid

Kevin Mofid

Director
Commercial Research

Savills Margaret Street