Scotland

19 July 2017, by David Cobban

The lack of Grade A supply is now critical in Scotland. Demand has been underwhelming for a variety of reasons but there is interest building and the challenge will the lack of supply suppressing the new demand

 

 

 
Vertex, Eurocentral

▲ Vertex, Eurocentral

Supply

■ The supply of warehouse space in Scotland for units over 100,000 sq ft has fallen by 7% in 2017 and now stands at 1.8m sq ft across the Central Belt.

■ This is made up of 12 seperate units of which all bar three are between 100,000 and 200,000 sq ft, with the average size being 156,000 sq ft.

■ All of the units currently on the market are second hand, aside from the Vertex unit at Eurocentral, which has been vacant since reaching practical completion in late 2011.

■ The largest unit on the market in Scotland at present is 5 Wardpark Road on the Wardpark South Industrial Estate in Cumbernauld, which totals 263,905 sq ft.

FIGURE 24

Supply

 
Figure 24

Source: Savills Research

FIGURE 25

Supply by grade

 
Figure 25

Source: Savills Research

Take-up

■ Take-up in Scotland for units over 100,000 sq ft has been historically volatile with take-up ranging from zero sq ft transacted per year to the record 1.7m sq ft transacted in 2016.

■ 2017 has however been disappointing for occupier demand for units over 100,000 sq ft, with no deals being recorded at the half way point of the year.

■ Based upon the long-term average 694,599 sq ft of warehouse space over 100,000 sq ft is transacted per year.

■ Over the last 10 years, the occupier based in Scotland has been diverse with no one occupier type dominating take-up. Indeed, food producers have accounted for 21% of all the space transacted compared to 19% of the market accounted for by the 3PL sector.

FIGURE 26

Take-up

 
Figure 26

Source: Savills Research

Development Pipeline

■ There are no units under construction speculatively over 100,000 sq ft in Scotland meaning we do not expect vacancy rates to fluctuate in the medium term.

■ With a number of occupiers recently choosing to build their own units, such as Lidl and other occupiers searching for land to construct their own units, the demand and supply case for future development remains strong.

TABLE 8

Key stats

 
Table 8

 

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Key Contacts

Kevin Mofid

Kevin Mofid

Director
Commercial Research

Savills Margaret Street

 

David Cobban

David Cobban

Director
Office & Industrial

Savills Glasgow

+44 (0) 141 222 4101

 

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