According to Savills, the UK warehouse market (units of 100,000 sq ft +) saw transactions totalling 4.8 million sq ft (445,934 sq m) in Q1 2017, with above average take-up recorded across the country’s core regions, including the North West, South East and West Midlands.
In particular, the West Midlands had one of its best quarters ever with take-up 100% above the long term average for the region, equalling the 2.1 million sq ft (195,096 sq m) achieved in Q1 2015. This significant increase in activity can be attributed to two off market deals conducted by Logicor, where XPO Logistics has taken 650,000 sq ft (60,386 sq m) in Tamworth and Jaguar Land-Rover has taken 557,000 sq ft (51,746 sq m) at Fort Dunlop, both on 10 year terms. Combined, this gave Logicor a 58% market share in the West Midlands. Furthermore, Savills also recorded above average take-up in the South East and North West of the UK, which reached 620,000 sq ft (57,599 sq m) and 904,000 sq ft (83,984 sq m) respectively.
Savills research shows that as much as 27% of the take-up in the first quarter was for speculatively built units, accounting for seven out of 23 transactions across the UK. Examples include 110,000 sq ft (10,219 sq m) at Banbury Cross let to Charge Automotive, 357,000 sq ft (33,166 sq m) to a large online retailer in Bolton and 225,000 sq ft (20,903 sq m), also in Bolton, to parcel company Whistl, indicating strong activity from a range of different sectors.
Richard Sullivan, national head of industrial & logistics at Savills, comments: “Whilst take-up overall has decreased following a record breaking 2016, regional activity remains strong particularly in the UK’s core industrial markets. As a result, the figures prove there is still significant appetite for speculative development from a variety of occupiers, which should encourage developers to continue to build new stock to satisfy ongoing demand.”