The latest Big Box research by Avison Young confirms that continued high levels of demand for e-commerce facilities have driven occupational activity to reach record levels for large grade A warehouses.
For the third consecutive year, take-up has increased, compared to the previous year, totalling 49 million sq ft, 57% up on the five-year average. Activity was driven by e-commerce, whether from retailers directly or third-party logistics providers. Amazon was the most active occupier, taking almost 9 million sq ft.
There will be a lack of supply of big box units in 2022. Availability amounted to 24.2 million sq ft at the end of 2021, 6% lower than at the end of 2020, meaning, for the second consecutive year, there is less than a year’s supply of stock.
There is also increasing pressure from occupiers, owners, and consumers to improve sustainability credentials and focus on decarbonisation.
Danny Cramman, Director, Avison Young Newcastle says. “Overall, there is unlikely to be a slowdown in demand for big box space across all UK regions in 2022, due to the continued shift in consumer behaviours. With online retail sales forecast to continue growing, there will be requirements for even more big box units to meet demand.”
There is strong evidence of development and investment activity across the north east region towards meeting future demand for large industrial and warehousing requirements. There is also anticipated requirements from supply chain companies in relation to both announced battery giga factories, being developed in the region.
The A19 corridor in Sunderland is a focus of new build activity where Avison Young and their joint agent HTA are marketing a large unit at the International Advanced Manufacturing Park (IAMP), as well as units under construction at Turbine Business Park and Hillthorn Business Park. Further South in County Durham Integra 61 has capacity to deliver a further 1 million sq. ft in addition to the Amazon fulfilment centre.
Danny Cramman comments: “This is an encouraging response by the property sector towards accommodating large space occupational requirements within high value speculatively developed schemes.”
