The Midlands recorded the highest level of take-up of logistics space in the first quarter of 2022, accounting for almost half (46%) of the total space taken across the UK.
According to CBRE’s UK Logistics Market Summary, of the 10.43m sq ft transacted in Q1, 3.4m sq ft (32.4%) was in the East Midlands, representing a 111% year-on-year increase. The East Midlands also ended the quarter with the largest amount of logistics space under offer, at 5.9m sq ft.
Logistics take-up in the West Midlands totaled 1.5m sq ft (14.1%), with 5.3m sq ft under offer. Available space fell for a second consecutive quarter to 1.7m sq ft, of which more than 1m sq ft was secondhand. There were no new speculative units completed during Q1.
In the East Midlands, the development pipeline is looking much healthier. At the end of Q1, the region had 4.9m sq ft of available space, the majority (73.3%) of which is speculative and currently under construction.
The demand for logistics space is putting upward pressure on rents, with nearly all UK regions experiencing rental growth during Q1. Prime rents in the East Midlands grew for the fifth consecutive quarter, reaching a record £8.25 per sq ft, while the West Midlands recorded the second highest prime rent across the UK regions at £8.50 per sq ft.
Luke Thacker, associate director in CBRE’s Midlands industrial and logistics team, said: “The Midlands was once again the standout performer, dominating take-up of logistics space during the first three months of the year and reaffirming its position as the UK’s logistics heartland.
“Take-up in the East Midlands was predominantly for build-to-suit and speculative units, a trend that looks set to continue, with almost all the 5.9m sq ft of space under offer in the region being build-to-suit. It’s a similar picture in the West Midlands, where again pretty much all the space under offer is either speculative or build-to-suit.
“The challenge in the Midlands, however, is the current shortage of new ready to occupy space and while there is speculative development in the pipeline, this is quickly being taken due to the competition for space. Developers have responded by building speculatively again but more space is needed to satisfy the strong market demand.”