West Midlands

31 January 2017, by Ranjut Gill

The continued resurgence of the automotive sector in the West Midlands is having knock on effects in the supply chain resulting in a more diverse occupier base compared to other UK regions

 

 

 

▲ Prologis Fradley Park

Supply

■ The availability of units in the West Midlands has fallen by a quarter in 12 months and now stands at 3m sq ft, compromising 20 separate units.

■ Of the units on the market at the start of 2017 90% are between 100,000 and 200,000 sq ft. Of the units over 200,000 sq ft Birch Coppice, Plot 6, developed speculatively by IM properties, is the largest, at 282,124 sq ft.

■ Due to a number of units being delivered speculatively in 2016, including two units at Rugby Gateway, the balance of supply in the market has shifted over the last two years. Whilst total supply has decreased the proportion has shifted with a 33% increase in Grade A supply in 12 months.

FIGURE 9

Current supply by grade

 
Figure 9

Source: Savills Research

Take-up

■ 2016 proved to be another strong year for occupier demand in the West Midlands, with 5.5m sq ft transacted across 28 deals, just one deal shy of equalling the 2014 record of 29.

■ Such has been the level of demand for warehouse space in the West Midlands it has the highest level of take-up for units let during construction of any region in the UK. With Jaguar Land Rover taking 327,000 sq ft at Prologis Park Ryton in the second quarter of 2016 this helped ensure that 14% of deals were for units still under construction.

■ The largest deal of the year came in the fourth quarter of the year when Screwfix committed to a 562,000 sq ft build to suit unit at Prologis Park Fradley on a 10 year term. However, given the fact that 64% of deals were in the sub 200,000 sq ft category the average size deal fell to 197,000 sq ft, the lowest level since 2013.

■ The West Midlands bucks the national trend for online retailers to dominate the market with the sector accounting for just 11% of take-up. Instead, manufacturers and the automotive sector accounted for a combined 35% of the market in 2016.

FIGURE 10

Take-up

 
Figure 10

Source: Savills Research

Development Pipeline

■ Five units totalling 1.3m sq ft are due for completion in 2017 in the West Midlands. These include the largest unit developed in this cycle, M6DC in Cannock, at 372,000 sq ft.

FIGURE 11

Take-up proportion by grade

 
Figure 11

Source: Savills Research

TABLE 3

Key Stats

 
Table 3

 

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Key Contacts

Ranjit Gill

Ranjit Gill

Director
Industrial

Savills Birmingham

+44 (0) 121 634 8402

 

Kevin Mofid

Kevin Mofid

Director
Commercial Research

Savills Margaret Street

 

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