Supply

The level of supply in the market has fallen by 7% in the last year. Currently, there is 920,540 sq ft available across five units, 14% of which is under offer. According to the three-year annual average take-up, there is just 0.3 years’ worth of supply in the region.

In terms of Grade, the vacant stock consists entirely of second-hand, low-quality stock, with 86% classified as Grade C and 14% Grade B. Whilst by unit count, there are currently four units available within the 100,000– 200,000 sq ft size band and one within the 300,000–400,000 sq ft size band.

The vacancy rate remains very constrained at 2.91%, which is the lowest level we have ever recorded. This continues to push the rental tone for the region higher, particularly for prime units, which now stands at £8.25 psf. The vacancy rate is set to remain low; it will rise to just 5.11% when the development pipeline reaches practical completion.

Take-up

Take-up in 2022 has reached 3.69m sq ft across 11 separate transactions – this is 187% above the long-term annual average and 26% above the previous high watermark. As expected, it is the lack of good-quality existing stock paired with the large proportion of consented and deliverable industrial and logistics sites that is pushing occupiers towards build-to-suit units.

In 2022, 65% of space transacted has been built-to-suit space, 25% has been speculatively developed space, and just 10% has been second-hand space. There is a clear shift from occupiers requiring space towards best-in-class units in order to ensure resilience in the future. In terms of unit count, 45% of the transactions were within the 100,000–200,000 sq ft size band, 27% within the 200,000–300,000 sq ft size band, 10% within the 300,000–400,000 sq ft size band, and 18% over 500,000 sq ft.

Occupier activity has been diverse: 36% of take-up has stemmed from high street retailers, 26% from manufacturers, 14% from grocery retailers, and 12% from 3PLs. The remainder was spread across a range of occupier types. In 2022, the largest transaction was at Gateway 14, a designated custom and tax site as part of Freeport East, where an occupier has committed to a 1.2m sq ft unit.

Development pipeline

Currently, the region has five units under construction, speculatively totalling 1.1m sq ft. There are two units within the 100,000–200,000 sq ft size band and three within the 200,000–300,000 sq ft size band.

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