The industrial property market in the South West is anticipating the next wave of demand from logistics companies for big boxes, with 2.3million sq ft of space ready for occupation.
According to Avison Young’s latest Big Box Bulletin, the real estate advisor’s half yearly update of distribution activity, the e-commerce sector is dominating the take-up of big boxes – warehouses over 100,000 sq ft – despite a slow start to the year across the UK. The non-food retail sector has been by far the most acquisitive during the first half of the year, accounting for 62% of take-up (with internet-only retail companies accounting for almost half).
With 90% of UK activity focussed in three regions – East Midlands, London and the South East, and North East – Paul Hobbs, Director at Avison Young in Bristol believes that the South West region will soon be experiencing similar take-up thanks to an improving pipeline.
He says, “During 2016/17 we experienced unprecedented levels of take-up, which had been fuelled by long-awaited speculative development across the region and saw mega deals at Central Park in Avonmouth to Amazon and DHL.
“As a consequence of the latent demand satisfied during this period, the first six months of 2019 unusually saw no warehouse deals over 100,000 sq ft in the region, but we’re expecting this to turn around in the second half of the year.”
The availability of big boxes in the South West has increased this year and currently stands at 2.3 million sq ft with recently completed units in Bristol including 105,000 sq ft at Western 105 (Curtis Hall) and 151,330 sq ft at Access 18 (St Modwen), while 137,300 sq ft at Junction One (Barwood Capital) is due to complete in Q4 2019. In addition, there is a reasonable range of second-hand logistics stock in units up to 390,000 sq ft.
Outside Bristol in the South West there are currently no significant grade A standing big box units available, although there are a number of speculative developments expected to start imminently. These include 106,000 sq ft by St Modwen at Chippenham (M4, J14) and Panattoni’s purchase of 60 acres from DB Symmetry in Swindon for a 600,000 sq ft speculative unit.
The most recent regional activity has been the progression of strategic land opportunities. In addition to Panattoni’s purchase there are on-going brownfield development site sales with recent best bids in Bristol for Scottish Power in Avonmouth (113 acres) and the administrators of Avara (95 acres). Also adding to the growing choice of grade A solutions, Mountpark has completed the servicing of its 75 acre Bristol XL plot.