Supply

The level of supply has increased to 4.85 million sq ft through 25 separate units, representing a 4% rise from the start of 2020. Using the five-year annual average, take-up there is just 0.87 years worth of supply left within the region.

Strong levels of transactional activity involving Grade A space has considerably reduced the amount in supply, 33% of vacant space is now classed as Grade A down from 50% at the start of the year. Furthermore, 51% of all space is second hand Grade B and 16% Grade C. By unit count the supply is skewed towards the smaller size bands with 76% being between 100,000–200,000 sq ft. There is a single unit available over 500,000 sq ft, Sherburn 667 which provides c.667,000 sq ft of second hand space near Leeds.

Take-up

Following the two strongest years of take-up ever recorded in the market, H1 2020 has performed exceptionally with take-up totalling 7.13 million sq ft through ten separate transactions. This has already surpassed the 2019 full year figure and is the strongest H1 ever recorded in the region. Given the current uncertainties within the market, it is astonishing 2020 is on track to be the best year on record.

Of the space transacted, 82% was build-to-suit and 18% second hand. The largest deal in H1 2020 was Amazon committing to 2.5 million sq ft at Follingsby Max in Gateshead.

Given the current supply dynamics, it is difficult to see the preference towards build-to-suit space changing until more units are delivered speculatively and second hand supply is absorbed.

Development pipeline

There are currently five units under construction totalling 1.72 million sq ft. The largest unit is Wakefield 515 in Knottingley totalling 515,000 sq ft.

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