According to Savills latest Big Shed Briefing, take-up of industrial space (units of 100,000 sq ft +) in the East of England hit 1.56 million sq ft (144,928 sq m) in 2019, the second highest ever recorded in the region and a 231% increase on last year’s figure. This can be attributed to an increase in supply over the last 12 months.
Savills notes that the recent rise in the availability of second hand stock has seen overall supply rise by as much as 70%. This has also been helped by recent speculative development, the first in the region for 10 years, at Suffolk Park in Bury St Edmunds, which has seen an additional 353,000 sq ft (32,794 sq m) come to market.
The success of the scheme, which saw 147,000 sq ft (13,656 sq m) let to Unipart last year, has seen developer Jaynic commit to building phase two, which will comprise a further 367,000 sq ft (34,095 sq m) across four buildings. Consequently, investor confidence has spurred further development at Gateway Peterborough where an additional two units are set to be delivered. Totalling 385,000 sq ft (35,767 sq m) and 226,000 sq ft (20,996 sq m) respectively, the units are due for practical completion in Q2 2020.
Historically, Savills figures show that take-up has slipped below average in recent years reaching just 470,000 sq ft (43,664 sq m) in 2018, largely due to serious supply constraints. However, this new injection of stock should continue to bolster transactional activity into 2020.
Key deals for the region in 2019 included FDS taking a 144,000 sq ft (13,378 sq m) BTS unit at Port One, Headlam Group constructing a 180,000 (16,722 sq m) sq ft BTS unit, both in Ipswich, and Urban Outfitters committing to 432,000 sq ft (40,134 sq m) at Gateway Peterborough. When it comes to occupier type, 3PL’s were the most dominant tenant accounting for 45% of space taken.
William Rose, director in the business space team at Savills Peterborough, comments: “The East of England has bounced back quite significantly following its previous slump, which is excellent news for the region. As we have seen at both Suffolk Park and Gateway Peterborough there is definitely demand for modern units and it is great to see further speculative development in the pipeline continuing to cater to occupier requirements. With this in mind, the outlook for 2020 is incredibly positive and we expect this to translate into further confidence in the market.”
