Supply

The supply of warehouse space in Scotland for units larger than 100,000 sq ft currently stands at 1.6m sq ft across nine separate units.

Occupier demand for good quality space has shifted the quality balance of the available supply. There are no Grade A units available on the market, 59% of the available space, is classified as Grade B second-hand and 41% as Grade C second-hand space.

In terms of unit count, 67% are within the 100,000–200,000 sq ft size band, and 22% are within the 200,000–300,000 sq ft size band. There is a single unit within the 300,000–400,000 sq ft size band which is Mossend 1 at Eurocentral Scotland providing 320,000 sq ft of Grade B second-hand space.

The slight increase in the available supply has pushed on the region’s vacancy rate, which now stands at 7.43%, remaining well below the 12% mark needed for rents not to rise.

Take-up

Take-up in 2020 reached 1.02m sq ft across six separate transactions, representing a 55% increase on 2019 take-up and 17% above the five-year average.

Adhering to historic trends, occupier demand has centred around the smaller-sized units. The 100,000–200,000 sq ft size band accounted for 72% of space transacted whilst the 200,000–300,000 sq ft size band accounted for 28% of space transacted.

Take-up in 2020 has revolved around second-hand space totalling 86% of all space transacted while 14% has been built-to-suit. Interestingly, Savills is seeing an increase in enquiries for built-to-suit opportunities due to the lack of good quality existing units. Occupier demands are increasing and lower-quality units are often unable to satisfy their requirements.

Development pipeline

There are still no units being speculatively developed over 100,000 sq ft in Scotland. As take-up increases, we expect a stable or declining supply which will keep the vacancy rate low in the short-to-medium term and, in turn, push on rental growth. This has been evidenced in the recent letting of Titan at Eurocentral to the NHS at £6.25 psf.

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