Big shed take-up in the North West remains strong within the region taking 14% of the overall national take up during the first half of 2017 says new research from GVA.
The latest Industrial Intelligence report from GVA highlights that deals at Logistics North, including Amazon with 357,000 sq ft, and M58 Distribution Centre in Skelmersdale to Accrol Papers who have taken 368,000 sq ft have helped keep the region buoyant in the market place. Amazon’s commitment to Logistics North has seen the online retail giant commit to a total of 2.3 million sq ft of space throughout the UK – amounting to 20% of big shed take-up during the first half of 2017.
Demand remains strong in the region especially for larger requirements where there are limited opportunities for the build to suit market – typical size requirements are 10 – 40 acre sites. These are generally strategic property acquisitions which are less dependent on contracts and relate to the positioning of the business and its supply chain.
There are currently more than four million sq ft of active requests for build to suit for units in excess of 200,000 sq ft in the region. However, there is limited new stock, with just six warehouses over circa 100,000 sq ft providing a total of 903,000 sq ft available.
Andrew Pexton of GVA said: “Supply will not increase immediately as only two units totalling 220,000 sq ft are currently under construction in the North West. There is a larger development pipeline but this will not be available for c 9 – 12 months.
“Occupiers have got used to being able to find existing buildings. Due to the illiquidity and lack of stock, the market is proving difficult for occupiers who cannot satisfy their immediate requirements. Improving rental levels and recent investment transactions which generate larger lot sizes for institutions favour larger sheds of between 200,000 – 400,000 sq ft.”
The research highlights that nationally the manufacturing sector has increased its share of big shed take-up during the same period. This was particularly evident in the automotive market, with deals to the likes of Michelin, Aston Martin and Jaguar Land Rover increasing the share of manufacturing activity to 28%.
Almost half of the big shed take-up during the period was concentrated in the Midlands – continuing the region’s dominance in the marketplace, but the North West continues to take a significant share of the take-up. Andrew Pexton of GVA Andrew added: “In the North West, occupier demand is still strong and there are a large number of enquiries in the market. “The main issue is land supply. Occupiers need large flat sites with immediate motorway access and an employable workforce.
“Employment land supply has diminished due to a mixture of take up of the better sites and local authorities relying on historic land banks. The main issue is that this land bank does not fit the requirements of modern industry. New allocations are required as a number of sites are close to being built out.”