The take-up of logistics space reached record levels in Q2 this year, with the East Midlands accounting for a third of the deals, according to latest research from CBRE.
The property consultancy’s ‘UK Logistics Market Summary’ reports that 55 deals totalling more than 15million sq ft of space were signed between April-June, representing a 12% increase from the previous quarterly record set in Q3 2020.
The East Midlands accounted for 32.7% (5m sq ft) of the total, with 11.4% (1.7m sq ft) of take-up in the West Midlands.
CBRE’s data relates to units above 100,000 sq ft. Online retailers make up the bulk of new occupiers (42%), thanks to the boom in e-commerce, though in the West Midlands, 11 of the 14 units taken up went to third party logistics (3PL)/distribution operators.
Luke Thacker, associate director in CBRE’s industrial and logistics team, said: “The Midlands’ central location makes it a popular choice among online retailers and 3PLs, with the region as a whole accounting for more than 41% of national take-up.”
A consequence of the record take-up is that ready-to-occupy supply has fallen by 43% since Q1 to a new low of 9.4m sq ft, with vacancy across the UK falling to just 2.1%.
The surge in demand in the East Midlands saw available space hit a six-year low, at 3.9million sq ft. The issue is even more acute in the West Midlands, which saw a 30% fall in available space to 3m sq ft.
Luke Thacker said: “The bulk of supply in the West Midlands is now second-hand, with a very limited amount of speculative space coming through – the lowest of all the English regions. Options for warehousing in excess of 100k sq ft here are particularly limited.”
Prime rents in the Midlands region have also risen as a result of supply issues, with the West Midlands now posting £7.50psf. In the East Midlands prime rents breached £7 for the first time, now standing at £7.25psf.