There is just six months of grade A industrial and distribution space left in the North West with demand outstripping supply, new data reveals. Tony McDonough reports
Demand for grade A industrial and distribution space is outstripping supply across the North West with just six months supply left.
According to the latest Big Shed Briefing by property firm Savills, demand is set to outstrip supply with low levels of good quality space. It reports a three year average annual take-up of 6.61m sq ft in 2022. This equates to just 0.51 years’ worth of supply.
The report states there are low levels of good quality supply, with data showing that only 17% of the available space is grade A, with 51% being grade B and 32% grade C. Occupiers are seeking newer space due to environmental standards and staff retention.
Take up was only marginally down on the previous year. Savills reports that take-up was 68% above long-term average. The average deal size was 294,191 sq ft.
Grocery retailers accounted for 27% of take-up in 2022, alongside online retailers and automotive manufacturers.
One of the North West region’s success stories has been the CDP/Mirastar development at Gorsey Point in Widnes. This saw more than 650,000 sq ft let prior to practical completion.
There are currently seven units being speculatively developed, totalling 2.23m sq ft with one over 500,000 sq ft. This, adds Savills, shows that supply is coming but not at a fast enough rate. 1m sq ft of the 2.23m sq ft has already been let prior to completion.
Last week LBN reported that Caddick Construction had completed a £15.7m 280,000 sq ft industrial development close to Wirral on behalf of Redsun. It formed part of the wider Aviator development.
Jonathan Atherton, industrial and logistics director at Savills Manchester, said: “Take-up in the North West reached 7.06m sq ft in 2022 through 24 transactions.
“We’re continuing to track enquiries from multiple parties on good quality prime stock, with 50% of the development pipeline already under offer and due to exchange in the first quarter of this year.
“This increased competition has caused net effective rents to increase and with the lack of the new supply coming forward we fully expect this trend to continue.”