Big shed availability at ‘all time low’
Demand for warehouses has led to an all-time low in big shed availability, says Colliers, with just one and a half months’ worth of supply of large speculative developments (over 100,000 sq ft) available to meet current market demand.
Take-up for ‘big sheds’ across the UK will see year end totals finish just short of the 2016 record high (32 m sq ft), according to the latest Industrial & Logistics Barometer for Q3 2018.
Availability of industrial space over 100,000 sq ft in size has fallen on average by 71 per cent in the last 10 years; with Wales (down 85 per cent), the North East (down 76 per cent), the South East and West Midlands (both 75 per cent) among the worst affected.
“The market is in good shape and we’re on track for another strong year of deals activity, so it’s no wonder we’re seeing availability levels continue to fall year on year. However, it’s the severe lack of available development land across the UK that is continuing to impact the sector,” said Len Rosso, Head of Industrial & Logistics for Colliers International. “We are operating under a challenging planning system, whereby we are seeing the limited land that is available for development being earmarked for residential, due to continued pressure from Central Government to address that national housing shortage. As a result, not enough land is coming through for industrial and logistics development, severely diminishing the sector’s ability to meet the continued demand from operators.”
Colliers’ latest Industrial & Logistics Barometer shows that ‘Retailer & Wholesalers’ continue to represent the largest proportion of deals, accounting for 53 percent (10.6 m sq ft) of transactions completed so far this year, which compares to 43 per cent in the same period last year (Q1 to Q3 2017). 3PL and Transportation was the next most active sector, accounting for 24 per cent, followed by Manufacturing at 18 per cent.
Rosso continued: “Brexit and other macro-economic factors are still impacting decision making, but 2019 has 6 m sq ft of large scale speculative development scheduled for completion, which should go a long way to address the current imbalance of supply and demand in the UK. Generally speaking, our latest research shows a robust picture, with continued demand for space from retail and 3PL operators driving rental growth.”
