Supply

The recent up-tick in transactional activity has led supply to decline in 2020 to now stand at 1.26 million sq ft across six units. Of this, just 15% is classed as Grade A compared to 45% this time last year. Further analysis demonstrates that 41% of supply is Grade C and will be in need of refurbishment as the majority currently cannot accommodate modern occupier requirements.

There are three units available in the 100,000–200,000 sq ft size band, two in the 200,000–300,000 band and a single unit comprising 300,126 sq ft. Moreover, of the current supply, 24% is under offer due to exchange in Q3 2020 which, is set to reduce the vacancy rate further from 5.25% to 3.97%.

Take-up

Take-up in H1 2020 has reached 1.04 million sq ft through four separate transactions, representing a 27% decrease on H1 2019 yet a 174% increase above the long-term H1 average.

Built-to-suit space accounted for the largest proportion of take-up, reaching 71%, the remaining 29% was speculatively developed space. No second hand space has been taken in the region, highlighting occupier preference towards better quality units.

Demand has stemmed from a diverse mix of tenants in H1 2020, food manufacturers accounted for the largest proportion of take-up at 61%, followed by wholesalers at 20%. Online retailers remained active accounting for 10% of H1 2020 take-up.

Development pipeline

There are currently two units under construction at Gateway Peterborough of 385,000 sq ft and 226,000 sq ft. Both of these are due to reach practical completion imminently, after they reach PC there will be no other units under construction in the region. Without any pipeline development, occupiers will need to look to sites such as Gateway 14 in order to satisfy requirements for good quality space.

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