The demand for logistics space in Yorkshire and the Humber has risen exponentially in recent years. In fact, take-up of big box units (100,000+ sq ft) reached the dizzy heights of 10.35 million sq ft in 2020, 220 per cent up on what we were seeing just 10 years ago and 111 per cent above the long-term average. Demand in the first part of 2021 has shown no let up with consistent demand across the region.

Excellent links to major roads, railways and ports, coupled with relatively low rents, has driven demand from occupiers seeking to acquire large buildings to locate their national distribution hubs, including Butternut Box at Symmetry Park, Doncaster (pictured above) and Clipper Logistics taking space at Sherburn 667. However, we’re now reaching a critical stage where delivery simply can’t keep up.

Availability of warehouse space in the region is becoming increasingly constrained, particularly for larger units, with supply for these decreasing 75 per cent over the past decade from 14.26 million sq ft in 2010 to 3.58 million sq ft in October 2020. The vacancy rate is now just 5.75 per cent, falling below the national average of 6.01 per cent.

Given the three-year annual average, this means that supply of larger units equates to just 0.64 years, and with the development pipeline totaling 1.85 million sq ft (around half a year’s typical take up) it’s becoming clear that this lack of future supply needs to be addressed.

Reinforcing this point further is the fact that the market shows no signs of slowing down. The continuing rise of ecommerce, compounded by a marked increase in the number of people living in the Yorkshire region, all point to a crucial need for further development.

The British Property Federation’s What Warehousing Where? report states that every new home requires an additional 69 sq ft of warehouse space to support the distribution needs of that household. Looking at Leeds in particular, and its need to provide an additional 2,387 new homes per year according to the Government’s calculation methods, this means that the city requires 165,000 sq ft of additional warehouse space each year just to accommodate household growth.

If you then account for housing need in the surrounding areas, such as Wakefield, Bradford and Harrogate, this suggests a need for approximately 6.4 million sq ft of additional space in the area over the next decade. By contrast, just 2.1 million sq ft has been delivered over the previous five years.

There are major schemes already underway, or in planning, within the region, such as Tungsten’s Super B at J26 of the M62 near Bradford, which are set to provide best in class logistics facilities. However, the rate at which new build, speculative space is being acquired is only increasing, with a number of units already under offer or attracting strong interest.

Therefore we need to see this development drive not only continue but increase, if the Yorkshire industrial market is to enjoy the same trajectory of growth it has experienced over the previous 10 years, in the next 10.

Further information

Contact Tom Asher

Read more Yorkshire: A region of opportunity