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Take-up reached 3.58m sq ft; 44% above the long-term average
WA 316, where Logicor leased 316,000 sq ft to a major retailer in 2021
Take-up in 2021 has been the second strongest ever recorded, with demand coming from a range of occupiers. 42% of the available supply is under offer and due to complete early next year. Now, prime rents are in the region of £7.50–£7.75 psf, which we expect to increase significantly as supply continues to fall
Rob Cleeves, Director, Bristol
Supply
The supply of units over 100,000 sq ft in the region currently stands at 3.61m sq ft across 20 separate units. Closer analysis shows that 32% of the supply is located within Wales, and 67% is in the South West. The vacancy rate in the region now stands at 9.22%, equating to 1.29 years' worth of supply.
The quality balance is heavily skewed towards lower-quality units, with just 16% of available space classed as Grade A, 41% is Grade B, and 43% is Grade C. The increased demand paired with lack of supply has left occupiers with no choice but to commit to these second-hand buildings. Consequently, Savills is aware 42% of the current vacant stock is under offer and due to exchange imminently. This is set to bring the vacancy rate to 5.25%.
By unit count, the supply continues to be dominated by smaller units with 60% being within the 100,000–200,000 sq ft size band, 30% are within the 200,000–300,000 sq ft size band, and 10% are within the 300,000– 400,000 sq ft.
Take-up
Take-up in the South West and Wales market totalled 3.58m sq ft across 17 separate transactions, 25% above the three-year annual average. Adhering to regional trends, deal volumes have centred around the smaller size bands, with 70% of deals being within the 100,000–200,000 sq ft size band, 18% in the 200,000–300,000 sq ft size band, 6% the 300,000–400,000 sq ft size band, and 6% over 500,000 sq ft.
2021 has seen 74% of take-up being second-hand space, 21% built-to-suit space, and 5% speculatively developed space. The supply is hindering take-up as occupier requirements centre around new, modern units.
In 2021, 34% of take-up has stemmed from the other sector. This is primarily Microsoft taking Imperial Park Newport comprising c. 1 million sq ft for a data centre. Online retailers have accounted for 27%, manufacturers 15%, 3PLs 11%, and the remaining has been from a variety of other occupiers.
Development pipeline
There is currently 670,017 sq ft under construction in the region across four units. All of these are located within the South West. There are three units under construction within the 100,000–200,000 sq ft size band and a single unit within the 200,000–300,000 sq ft size band.
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