South West

31 January 2017, by Rob Cleeves

With record levels of take-up and record low levels of supply there remains capacity for increased levels of speculative development across all markets in the South West

 

 

 

▲ Bristol Gateway

Supply

■ There is a chronic lack of supply in the South West market as currently 374,904 sq ft is available across two existing units. There has been a 69% decrease in the available supply from Q4 2015 which underlines the current shortage of large units in the South West region.

■ The only Grade A unit is WA248 in Bristol where 248,127 sq ft is available. The strong occupier demand in the market has resulted in 10 units being removed from supply in 2016.

FIGURE 18

Supply by grade

 
Figure 18

Source: Savills Research

Take-up

■ 2016 was a astonishing year for the South West market, with 2016 take-up being the strongest year on record. Takeup reached 4.3 million sq ft which was over three and half times 2015 take-up and double the long-term average.

■ There were three deals above 500,000 sq ft in 2016 most notably The Range which acquired land to build 1.1 million sq ft at Central Park, Bristol. Lidl acquired a 500,000 sq ft unit and a 600,000 sq ft unit in Exeter and Bristol respectively.

■ The market was very liquid in 2016 with 14 deals being recorded which was the highest on record and more than double the long term average. The lack of Grade A units available has meant that 64% of the deals in 2016 involved second hand units.

■ High street retail occupiers have accounted for the highest amount of space transacted at a 27% market share. This figure is skewed by The Range deal at Central Park. The third party logistics business sector accounted for the highest proportion of deals recorded at 36%.

■ There was only one unit speculatively developed in the South West in 2016 which was Howard Tenens’ Bristol Gateway which comprised of 169,000 sq ft. This unit was let immediately after practical completion to C M Downton highlighting the strong demand in the South West for modern specification units.

FIGURE 19

Take-up

 
Figure 19

Source: Savills Research

Development Pipeline

■ There is currently 441,600 sq ft under construction across three units, all due for delivery in 2017. Mountpark are developing two units at Mountpark Bristol totalling 199,500 sq ft and 126,500 sq ft, both are due to reach practical completion in Q2 2017. Isec will deliver a 115,600 sq ft unit at Horizon 38 which will achieve practical completion in Q3 2017.

FIGURE 20

Development Pipeline

 
Figure 20

Source: Savills Research

TABLE 6

Key Stats

 
Table 6

 

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Key Contacts

Robert Cleeves

Robert Cleeves

Director
Industrial & Logistics

Savills Bristol

+44 (0) 1179 102 227

 

Kevin Mofid

Kevin Mofid

Director
Commercial Research

Savills Margaret Street

 

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