Internet retailing and last mile delivery remains the dominant force in big footprint warehouse take-up during the first half of 2017, a continuing reflection of changing retail patterns in the UK, says new research from GVA.
The latest Industrial Intelligence Report from GVA says this was particularly evident in the South West, where Amazon took its largest deal of the period with 1.2 million sq ft of space to be built at Central Park in Bristol. This was one of five deals by the online retail giant, who committed to 2.3 million sq ft of space in the first half of the year in the UK – 20% of big shed take-up.
Even so, the total warehousing acquired in the UK was actually down on last year bringing overall take-up of modern distribution units over 100,000 sq ft during H1 2017 to 11 million sq ft, just below the five-year average. This follows a record breaking year in 2016.
In the South West, the region has taken a considerable share of the UK’s big shed take-up, at 15%, in a stellar year so far. Notable deals include new strategic sites for Lidl, DHL and Davies Turner. The Midlands continues to dominate the UK market however with almost half of all take-up.
Commenting on the report, Paul Hobbs at GVA says: “General demand levels for big sheds remain robust with a number of enquiries for existing units, design and build and land acquisitions on-going, particularly from retailers, parcel carriers and aerospace related manufacturing companies.
“The existing supply of big sheds in the UK generally remains constrained but has increased over the past year as 2016 saw the highest level of speculative completions in the current cycle.”
The supply drought experienced in the South West is being eased with one of the largest speculative commercial developments ever seen in Bristol – Horizon38 in Filton. This scheme combines 580,000 sq ft of industrial and distribution buildings in a range of sizes up to 115,000 sq ft, with a further 25 acres of mixed employment space.
The South West has been suffering from a declining supply of good quality space for growing employers since 2007, but supply is now coming on stream.
Paul continues, “A lack of industrial site options outside Avonmouth, together with the wider economic downturn, led to a serious lack of investment and opportunity in the region’s industrial stock, leaving occupiers with little or no choice when it comes to relocation or expansion in the traditional city employment areas.
“Leading the pack, Horizon38 marks an end to this property drought. With 320,000 sq ft of quality space reaching completion shortly, occupiers now at last have the chance to benefit from this renewed activity in the market.”
