Despite the uncertain outlook for commercial real estate and the wider economy, the industrial sector’s resilience and strong market fundamentals have held firm, according to latest data by Avison Young.
“Although national take-up levels year to date have fallen short of 2021’s total (40.28 million sq ft), this has been driven not by the current economic climate but by a chronically undersupplied market. Availability of grade A space across the UK stands at 24 million sq ft, equating to only 2 months’ worth of supply based on demand of the last three years,” says James Short, Avison Young, Bristol.
“Nevertheless, demand should remain strong, particularly for ‘best-in-class’ buildings with strong ESG/BREEAM credentials. Landlords will look to capitalise on this demand by deploying additional grade A stock and further retrofitting existing stock as they progress towards the government’s MEES targets by 2030.”
Take-up across the South West region during Q3 came to 514,465 sq ft, compared to a five year Q3 average of 256,175 sq ft.
In Bristol, 36 deals were transacted in the third quarter of this year, mainly consisting of multi-let properties and a handful of smaller mid-boxes, with only three deals over 50,000 sq ft. The shrinking availability of standing stock is continuing to hinder take-up in Bristol, causing a wall of occupiers who can’t find what they want and need.
However, with a number of new spec warehouse buildings in the region now being built out, there is more positivity in the air for occupiers.
James continues, “Developers are now factoring environmental and social value-add into their new build schemes to ensure they have a best-in-class, future-proofed product, such as at Horizon38 in Filton and Matrix49 in Avonmouth.”
Unit G5, the 115,000 sq ft warehouse at Horizon38 from MSF Filton is now taking shape, ready for occupation April next year. Whilst Equation Properties have just started on site with Matrix49 at Avonmouth, speculatively building out 130,000, 170,000 and 235,000 sq ft units.
