The supply of Grade A industrial units larger than 100,000 sq ft in the north west declined by 55% year-on-year at the end of June 2017, according to JLL’s latest UK Big Box Industrial & Logistics research.
The consultant said that while availability has grown marginally (+1%) since the start of 2017, the drop-off over the last year, coupled with a subdued development pipeline, means the region’s supply challenges are set to persist.
JLL’s research identified 1.05 million sq ft of Grade A available space in the North West at the end of June 2017. This comprised six new units of approximately 926,000 sq ft – including one speculative scheme – and one good quality secondhand unit totaling c.129,000 sq ft.
The vacancy rate for Big Boxes in the north west stood at 3%, against a national average of 6%, and JLL predicts that the region has a development pipeline of just 530,000 sq ft for the next 12-18 months.
According to the research, take-up of Big Box units was 37% lower in H1 2017 than in the same period last year. Two large units were taken up in the North West in the first half of 2017. Whistl signed a ten-year lease to occupy 225,031 sq ft at Logistics North Bolton, while JD Sports agreed a build-to-suit deal totalling 366,000 sq ft at Kingsway in Rochdale.
Andrew Lynn, North West director of Logistics & Development, JLL UK, said: “The region’s supply challenges have led to a more subdued Big Box market so far in 2017 and, with a low development pipeline, this looks sets to persist.
“Yet, the large deals completed in the first half of the year point to the ongoing demand for quality space. The speculatively-developed Logistics North unit was let to Whistl in January, after only completing at the end of 2016, while JD Sports’ commitment to Kingsway is typical of the large built-to-suit requirements which remain in the offering.”
According to the research, retailers have accounted for 72% of total take-up in the north west over the last 18 months, followed by manufacturers (10%) and logistics occupiers (7%).
Nationally, JLL forecasts that rents for Big Box distribution properties are set to grow by 3.1% this year.
