UK Logistics: 

Big Shed Briefing

Big Shed Briefing
Big Shed Briefing

25 January 2018, by Kevin Mofid

Supply and vacancy steady as take-up recedes to long-term average levels

Summary

■ There has been 24.46m sq ft of warehouse space over 100,000 sq ft transacted in 2017, which is 2% higher than the long term average.

■ The principal driver behind the fall in take-up has been a sharp decline in the amount of build to suit deals from 18.50m sq ft in 2016 to 11.49m sq ft in 2017.

 

■ This can be attributed to the fact the businesses are taking longer to commit to capital intensive projects, potentially driven by the current uncertainty around our future trading relations with the EU.

■ The supply of warehousing in the UK currently stands at 28.63m sq ft, giving a vacancy rate of 6%. We are tracking 4.4m sq ft of space through the development pipeline which will be added to our supply statistics in 2018.

■ The sector remains attractive to investors from across the globe. £3.7bn has been invested in logistics warehouses in 2017 making it the second strongest year on record with overseas investors accounting for a quarter of purchasers. The wider industrial sector accounted for 17% of all investment in commercial property, a record high.

Main image: Altitude Milton Keynes where a unit of 574,000 sq ft is being developed by Gazeley and due to complete in the first quarter of 2018

Articles from 'Big Shed Briefing – January 2018'

Nationwide overview

25 January 2018

Nationwide overview

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

London & The South East

25 January 2018

London & The South East

London & the South East is a geographically large region and levels of supply remain critically low in many sub markets across the region, particularly around the northern and southern M25

East Midlands

25 January 2018

East Midlands

Build to suit demand levels remain strong and in 2018 we expect grade A sites such as East Midlands Gateway and DIRFT III to absorb an increasing amount of these requirements

West Midlands

25 January 2018

West Midlands

Another resolute performance across the West Midlands and with the supply remaining tight we anticipate a similar performance in 2018

North West

25 January 2018

North West

2017 saw a similar number of transactions as 2016, but with a lower average size of deal we saw an reduction in take-up. With a number of large scale requirements in detailed discussions we are forecasting a strong year in 2018

Yorkshire & The Humber

25 January 2018

Yorkshire & The Humber

2017 take-up is down on previous years but this as a reflection on grade A supply levels as we are still seeing a healthy level of demand. We expect a flurry of major transactions will take place in the region in the first half of 2018

South West

25 January 2018

South West

After a flurry of occupier site purchases in 2016/17 we are now seeing the development community react with renewed vigour on speculative development

East of England

25 January 2018

East of England

The strong levels of take-up in the region have seen quoting rents increase which may in turn encourage developers and investors to deliver much needed speculative development

Scotland

25 January 2018

Scotland

Last year Scotland experienced encouraging take-up which has tightened supply to an all-time low. With no sign of speculative development we will continue to rely heavily on the Build-to- Suit market to satisfy occupational demand

National investment

25 January 2018

National investment

Investor appetite for industrial ahead of other sectors, combined with capital growth and rising rents, has almost doubled industrial property’s market share, a trend we expect to continue into 2018

Build Cost & Programme

25 January 2018

Build Cost & Programme

Build costs and programme delivery time scales have stabilised into 2017

Outlook

25 January 2018

Outlook

Conflicting signals but strong start expected

 
 

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Key contacts

Kevin Mofid

Kevin Mofid

Director
Commercial Research

Savills Margaret Street