North West

31 January 2017, by Jon Atherton

We are yet to see the next wave of new speculative development to the region. With just over 1m sq ft of speculative Grade A space left a severe shortage of new space will shortly be upon us

 

 

 

▲ Crossflow 380

Supply

■ There is currently 7.1 million sq ft available across 40 existing units. Supply has increased by 23% from Q1 2016 after a surge of speculative development took place in the region.

■ The North West has the highest amount of available space of all the regions in the UK. However 75% of the units available are either of Grade B or C quality and many of the Grade C units have been for vacant for long periods. The region accounts for 54% of all available Grade C units in the UK which highlights the scale of the Grade C supply available in the area.

■ Developers have responded to the lack of Grade A supply in the North West region and there are currently seven speculatively developed units on the market totalling 1.4 million sq ft. This will decline sharply in the first part of 2017 as a number of units are either under offer or have exchanged.

FIGURE 12

Supply by grade

 
Figure 12

Source: Savills Research

Take-up

■ Take-up reached 4.2 million sq ft in 2016 which was a healthy year for the market. Although this was 8% below 2015 take-up it was still 18% above the long-term average highlighting strong occupier demand. There were 22 deals recorded in 2016 which is the second highest amount since 2007 underlining the high liquidity evident in the market.

■ Grade A space accounted for 72% of all space transacted in 2016. There were four deals involving recently speculatively developed units totalling 856,000 sq ft, all of these units were let within six months of practical completion.

■ The largest deal in 2016 was AO.com acquiring 386,000 sq ft at Crossflow 380 in Crewe, although the 100,000-199,999 sq ft size band was the most active accounting for 77% of deals. This is reflected in the average deal size for the region which is 190,282 sq ft. The online retail sector was the most active in 2016, acquiring 1.1 million sq ft which equated to a 29% market share. Amazon was the most notably active occupier in 2016 acquiring three units over 100,000 sq ft in the region.

FIGURE 13

Take-up

 
Figure 13

Source: Savills Research

FIGURE 14

2016 take-up by grade

 
Figure 14

Source: Savills Research

Development Pipeline

■ There are only two units being speculatively developed in the region, 150,847 sq ft at R-150 in Winsford and 160,000 sq ft at Ma6nitude, Middlewich.

TABLE 4

Key Stats

 
Table 4

 

placeholder

Key Contacts

Jonathan Atherton

Jonathan Atherton

Director
Industrial & Logistics – North

Savills Manchester

+44 (0) 161 277 7207

 

Kevin Mofid

Kevin Mofid

Director
Commercial Research

Savills Margaret Street

 

Subscribe to Savills research

 

Would you like to be notified via email about new research?