Supply

Supply of units over 100,000 sq ft is now at the lowest level ever recorded in the region. Currently, there is 2.45m sq ft available across 17 separate units. This has pushed the vacancy rate lower to 2.90%, leaving just 0.28 years’ worth of supply in the market according to the three-year annual average take-up.

Now, just 5% of the available supply is classified as Grade A. The region is in desperate need of new stock to relieve this chronic shortage. 65% of the stock is Grade B, with 30% Grade C. As with a large proportion of Grade B and C stock, they could often be considered obsolete through not being capable of accommodating modern occupier requirements.

An ongoing concern is that we are seeing occupier demand for larger units increase within the region; however, 88% of the stock is within the 100,000–200,000 sq ft size band, and 12% the 200,000–300,000 sq ft size band. Consequently, occupiers have to either commit to built-to-suit units or look towards neighbouring regions.

Take-up

Following the three strongest years of take-up ever recorded in the market, H1 2021 has performed exceptionally, with take-up totalling 6.77m sq ft through 10 separate transactions. This has already surpassed the average annual figure by 36% and is the strongest H1 ever recorded in the region.

Of the space transacted, 43% was build-to-suit, 34% was speculatively developed space, and 23% was second hand. The largest deal in H1 2021 was Amazon committing to c.2m sq ft at the Wakefield Hub.

Activity was spread over the size bands – by deal count, 37% were within the 100,000–200,000 sq ft size, 21% in both the 200,000–300,000 sq ft and 300,000–400,000 sq ft size bands. The 400,000–500,000 sq ft size band saw 5% of deals, and the 500,000 sq ft+ size band saw 16%.

The majority of activity in 2021 has stemmed from online retailers, who accounted for 43% of all take-up, and 3PLs, who accounted for 27%.

Development pipeline

There are currently 10 units under construction totalling 2.71m sq ft. Two of the units announced speculatively are over 600,000 sq ft, which will be welcome by occupiers given the number of larger requirements in the region.

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