Supply

A recent rise in second hand availability has seen overall supply rise by 70% and now stands at 1.47m sq ft across seven units. Of this, just 27% is classified as grade A, down from 56% 12 months ago. Following recent speculative development at Suffolk Park, the largest Grade A unit on the market is SP206 in Bury St Edmonds.

The majority of supply in the region falls into the 200,000–300,000 sq ft category where three units account for 49% of the availability. The largest unit on the market is a second hand unit of 300,000 sq ft near Sudbury.

Take-up

Following on from a below-average year in 2018 take-up has rebounded sharply with 1.56m sq ft transacted across nine buildings, the second-highest amount ever recorded across both measures.

Interestingly, compared with the previous high watermark of 2017 when BTS deals accounted for 74% of all new space taken, 2019 was more balanced with second hand space accounting for 42% of the market and new speculative space making up 9% and BTS the balance.

3PL’s were the dominant tenant accounting for 45% of the space taken with the largest deal being for The Headlam Group who are constructing a 180,000 BTS unit in Ipswich. The largest overall deal was Urban Outfitters who committed to a 432,000 sq ft unit at Gateway Peterborough.

Development pipeline

Following the first speculative construction in the region for 10 years at Suffolk Park and subsequent letting of SP147, confidence has increased for investors to forward-fund the delivery of two units at Gateway Peterborough. The units of 385,000 sq ft and 226,000 sq ft will reach practical completion in Q2 2020.

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