North West

19 July 2017, by Jon Atherton

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

 

 

 
360 at Logistics North

▲ 360 at Logistics North

Supply

■ The North West has the highest amount of units available across the whole of the UK, although the majority of these are poor quality and are arguably not fit for purpose in the modern supply chain. Indeed, 73% of total space available in the North West is classified as Grade B or C which equates to 4.2m sq ft, again, the highest amount in the UK.

■ Whilst there is currently 5.5m sq ft available across 33 separate units, the supply has fallen by 11% from Q4 2016. This has been caused by strong take-up of speculative units in the market, with three being let in H1 2017. The largest unit currently available is Warrington 379 which comprises 378,942 sq ft, this unit is of Grade B quality.

FIGURE 12

Supply by grade

 
Figure 12

Source: Savills Research

Take-up

■ Take-up in the North West reached 1.5m sq ft by the end of H1 2017 which represented a quiet start to the year. This is reflected in the fact that take-up is 28% below the same stage in 2016.

■ It is encouraging though that there is clear occupier demand for speculatively developed units in the region. As previously mentioned there have been three speculative units let in H1 2017, the largest being 360 at Logistics North where Amazon leased 357,700 sq ft in Bolton. Surprisingly there has not been a build-to-suit deal signed this year in the North West, this is unusual as the long term average take-up share proportion of build-to-suit space is 37%.

■ The average deal size in the region for the year is 191,125 sq ft and the 100,000-200,000 sq ft size band was the most popular amongst occupiers in H1 2017 with 63% of deals being recorded in this size band. There have only been two deals this year above 300,000 sq ft the aforementioned Amazon deal at Logistics North and Accroll Papers leasing 368,000 at Unit 3/4 Skelmersdale M58.

FIGURE 13

Take-up

 
Figure 13

Source: Savills Research

Development Pipeline

■ There is 420,847 sq ft under construction across three units, the largest being Magnitude where DB Symmetry is building a 145,000 sq ft unit. The most recent announcement was Orbit Developments embarking on construction of a 110,000 sq ft unit at Academy Business Park in Knowsley.

FIGURE 14

Average deal size

 
Figure 14

Source: Savills Research

TABLE 4

Key stats

 
Table 4

 

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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

 

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