Supply

The market has experienced increasing supply constraints stimulated by record levels of take-up throughout 2018. Available supply currently sits at 3.75m sq ft across 19 separate units representing a 35% fall from 2017.

The majority of available supply sits within the 100,000-200,000 sq ft size band accounting for 84% of available units. However, there are three units in the region over 400,000 sq ft, the largest being Premier North Industrial Estate which comprises 546,970 sq ft. Of the available supply 83.81% is classified as second hand.

Take-up

2018 has seen the strongest levels of demand ever recorded. Take-up reached 9.48m sq ft through 25 separate deals, a 562% increase from 2017 and a 68.6% increase from the previous high water mark of 5.62m sq ft in 2014. It should be noted that we regard 2017 as an anomalous year as take-up was a 66% decrease on the long-term average.

The increase can be attributed to multiple large build-to-suit deals, such as Amazon acquiring 1.99m sq ft at Integra 61 in Durham. In 2018, 28% of the floor space transacted was for build-to-suit units, however, by deal count, 68% of deals were for second-hand units. In fact, Yorkshire saw the largest second-hand deal nationwide through Clipper acquiring Sheffield 615 totalling 615,000 sq ft.

The 100,000-200,000 sq ft size band experienced the highest deal volume in 2018, with 48% of deals recorded being within this size band. The 400,000 sq ft+ size band also performed well, accounting for 24% of units transacted.

Development pipeline

There are currently four units under construction throughout the region totalling 804,765 sq ft. The largest unit is G Park Doncaster where Gazeley are speculatively developing 275,300 sq ft. The unit is set to achieve practical completion in Q1 2019.