As we move further into the latter half of the year, there is no secret that take up of industrial space across most of the UK has taken a dip. This inevitably included the Yorkshire region where take up reached 1.8 million sq ft in the first half, down from 3.85m sq ft in H1 2022 signifying a return to levels seen prior to the pandemic.

However, despite this reduction in take up, Yorkshire is still facing a significant supply shortage at certain size points, particularly along the key M62 and M1 corridors. Region-wide the vacancy rate sits at just 3.85 per cent for big box units of 100,000 sq ft or more. This equates to only 0.68 years’ worth of supply, highlighting the need for developers to continue to deliver quality stock across the region. Furthermore, when compared with the national vacancy rate of 6.25 per cent, it’s clear to see that the Yorkshire market is more constrained than most.

I initially addressed this issue two years ago, at which point the Yorkshire vacancy rate stood at 5.75 per cent. It’s therefore apparent that over the course of those years, the demand for space has consistently outstripped supply. Since 2021, we have seen major developments come out of the ground, including Tungsten’s Super B near Bradford, which is now let to Advanced Supply Chain and Equation’s Prism Park in Glasshougton, now let to Ifco. 

While there are currently 14 units available on the market, just 35 per cent is Grade A speculatively developed space and 22 per cent is second hand Grade A space, with the remaining Grade B or C. Further analysis reveals that a significant proportion of that Grade B or C stock may no longer meet modern occupier requirements due to the outdated facilities, potentially making much of this stock obsolete in the not too distant future. In addition, much of this space is also set to fail the Government’s upcoming legislation to reach a minimum of EPC B standard by 2030, again highlighting the need for a consistent development pipeline of quality stock over the next few years.

There are currently 16 units under construction across Yorkshire, totalling 3.7m sq ft. This includes Konect 62 situated at the intersection of the sort after M62 corridor and A1 in Knottingley with the first of three speculatively built warehouses available from September 2023 and Velocity Point in Leeds available from October 2023. The 105,000 sq ft at Velocity Pointis the only unit in excess of 100,000 currently under construction in West Yorkshire.

In spite of the slowdown in take up, we are seeing a growth in occupier requirements, with a number of existing units now under offer and due to complete this quarter. We are also seeing interest from various occupier types, with take up in H1 coming from a mix of 3PLs, grocery retailers, manufacturing and more alternative sectors. Interestingly manufacturers accounted for 28 per cent of take up across the UK in H1 2023.

Therefore, while the market has no doubt been volatile and unpredictable, it’s evident that activity in the region remains robust. We may have seen a recalibration back to pre-Covid-19 levels, but with a renewed uplift in requirements and a constrained development pipeline, the race for space across Yorkshire is certainly continuing.

Further information

Contact Tom Asher

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