According to Savills latest Big Shed Briefing, take-up of industrial space (units of 100,000 sq ft +) in the East of England hit 2.66 million sq ft (247,122 sq m) in 2021, 136% above the long-term annual average. This can largely be attributed to significant activity along the eastern stretch of the A14 corridor following the recent Freeport East announcement.
Key deals across the region saw MH Star and Oatly Group AB taking 226,000 sq ft (20,996 sq m) and 385,000 sq ft (35,767 sq m) respectively at Peterborough Gateway, the former 735,000 sq ft (68,283 sq m) Debenhams unit in Kingston Park Peterborough let to Amazon and a 76,000 sq ft (7,060 sq m) pre-let to Hermes at Jaynic’s Suffolk Park.
Since being granted Freeport status in March 2021, the East of England has seen an increase in enquiries from a diverse range of occupiers looking to take advantage of the benefits afforded by being located on one of the designated schemes. These include Jaynic’s 156 acre (63 hectare) site, Gateway 14, in Stowmarket and Curzon de Vere’s Port One Logistics Park in Great Blakenham.
As a result of this high level of activity, supply has fallen by as much as 33% in the last 12 months. Currently there is 985,000 sq ft (91,509 sq m) available across three units, equating to just under five months’ worth of supply. What’s more, 60% of existing stock is categorised as Grade C. Due to these constrains quoting rents have increased by up to 16%, at £7 per sq ft (£75 per sq m).
To remedy this, the growing focus on the region has translated into a significant development pipeline. There are currently seven speculative units totalling 1.48 million sq ft (137,496 sq m) under construction including 473,000 sq ft (43,943 sq m) being delivered by Firethorn at Peterborough South and a further 160,000 sq ft (14,864 sq m) at Suffolk Park.
Phil Dennis, director in the Eastern region industrial team at Savills, comments: “It is fantastic that the East of England has continued to outperform with some significant deals in 2021. The Freeport East announcement will continue to drive requirements, in particular along the Eastern stretch of the A14 corridor, which is already seeing unprecedented levels of demand as a result. Ultimately, this is very good news for the region that historically was not considered a core industrial & logistics location.”
