Supply

Recent transactional activity involving two of the largest buildings in the East of England has led supply to drop to the lowest levels ever recorded within the region currently standing at 458,237 sq ft across two units, only one of which is Grade A quality.

The supply is skewed towards the 200,000–300,000 sq ft size category with 100% of available units being within this range. Given the occupier preference for units within the 100,000–200,000 sq ft size band with an average of 70% of total sq ft transacted being within this range there is evidently supply constraints in the market. Moreover, using the five-year average annual take-up for the region of 1.42m sq ft there is just 0.32 years of supply left in the East of England.

Take-up

Following on from a below average year of take-up in 2018, H1 2019 has outperformed predictions reaching 1.19 million sq ft at the half-year point representing a 48% increase above the long-term yearly average. The high levels of take-up can be attributed to the influx in build-to-suit transactions which have accounted for 52% of the total space transacted 2019 YTD. The 100,000–200,000 sq ft size band performed the best in the region accounting for 64% of the total sq ft transacted and 83% of deal count. Interestingly, 75% of all space transacted was of Grade A quality, highlighting occupier preference for top quality space in the area.

The largest deal in H1 2019 was at Peterborough Gateway where Urban Outfitters will take 432,000 sq ft.

Development pipeline

Following the delivery of two units last year at Suffolk Park in Bury St Edmunds, there are now no speculative units scheduled for delivery in 2019. However, Savills are aware of the potential to speculatively develop two units at Peterborough Gateway and other potential sites coming forward.

_{Read the articles within Big Shed Briefing below.}