Supply

Supply within the region currently stands at 7.19m sq ft, falling 17% from the peak of 8.68m sq ft reached in Q2 2019. Of the vacant space on the market, 37% is considered to be of Grade B & C quality which given the fact take-up is dominated by Grade A units could suggest this stock is not suitable for modern requirements.

Of the 40 units on the market, 35% have been constructed speculatively, and all but 10 are under 200,000 sq ft. This does suggest that the market could take more units of a larger size, historically just 39% of take-up is for units under 200,000 sq ft. The largest unit on the market remains Goliath in Coventry at 666,044 sq ft which has been vacant now for 23 months.

Take-up

After five consecutive below-average quarters of take-up, it was pleasing to see two above-average quarters in the second half of 2019. This meant that take-up for H2 2019 was 16% above the long-term average and that 2019 overall saw a 15% rise in take-up on 2018. This stronger performance was aided by 1.50m sq ft of transactions for speculatively constructed space, the highest amount since 2011, which made up 38% of the total market in 2019.

The year finished strongly with the largest BTS deal of the year where Amazon committed to 366,000 sq ft which will be constructed at Redditch Gateway by Stoford. Overall, the largest tenant type in the region in 2019 was the automotive and manufacturing sector which made up 41% of take-up.

Development pipeline

Seven units are currently under construction within the West Midlands totalling 1.49m sq ft. The largest unit currently under construction is the recently announced Fradley 432 where Evans Property Group are speculatively developing 431,500 sq ft set to reach practical completion Q1 2020.

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