Supply

The supply of warehouse space has increased by 32% in the last 12 months to stand at 3.38m sq ft across 16 units. Using the three-year average annual take-up of 6.61m sq ft, this equates to just 0.51 years’ worth of supply in the region.

In terms of Grade, 17% of the available space is Grade A, 51% is Grade B, and 32% is Grade C. Savills has analysed the EPC standards of each unit in the North West – a large proportion do not comply with the government targets of reaching EPC B by 2030. These units should undergo comprehensive refurbishment in order to be attractive to future occupiers.

By unit count, 63% of the vacant stock is within the 100,000–200,000 sq ft size band, 13% is within the 200,000–300,000 sq ft size band, 19% is within the 300,000–400,000 sq ft size band, and 5% over 500,000 sq ft.

The vacancy rate continues to remain at low levels and won’t rise substantially in the short to medium term soon as 50% of the development pipeline is already under offer.

Take-up

Take-up has reached 7.06m sq ft across 24 transactions causing the average deal size to reach 294,191 sq ft. The long-term annual average take-up currently stands at 4.19m sq ft.

In 2022, 46% of take-up has been built-to-suit space, 35% has been speculatively developed space, and the remaining 19% was second-hand space. According to the long-term average, 51% of space transacted per annum is second-hand space, 24% is new speculatively developed space, and 25% is built-to-suit space.

By deal count, in 2022, 46% of transactions have been within the 100,000–200,000 sq ft size band, 17% within the 200,000–300,000 sq ft size band, 17% within the 300,000–400,000 sq ft size band, 3% within the 400,000–500,000 sq ft size band, and 17% over 500,000 sq ft. Grocery retailers accounted for 27% of take-up in 2022, 3PLs 22%, online retailers 17%, the automotive sector 9%, with the remainder spread across a range of sectors.

Savills has seen lease lengths increase in the North West to stand at 13.36 years. Moreover, due to the rising competition, prime rents have been pushed higher to £8.75 psf.

Development pipeline

There are currently seven units being speculatively developed, totalling 2.23m sq ft. There are three units within the 100,000–200,000 sq ft size band, two within the 300,000–400,000 sq ft size band, one within the 400,000–500,000 sq ft size band, and one over 500,000 sq ft.

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