Take-up of industrial space across the North West hits 2.15m sq ft in the first half of 2023 with Liverpool city region deals among the nine transactions. Tony McDonough reports
Take-up of industrial and logistics space across the North West hit 2.15m sq ft across nine deals in the first half of 2023.
This was 3% above the long-term average, according to the latest data in the latest Savills Big Shed Briefing. Manufacturers accounted for 43% of the total take-up, followed by high street retailers, data centres and film studios.
Average deal size of 238,859 sq ft. Savills reports the supply of warehouse space in the North West has increased by 111% in the last 12 months.
Using the three year average annual take-up, this is equivalent to 0.84 years’ worth of supply in the region. Although the vacancy rate has increased to 6.17%, this is still crucially below the peak of 9.6% in 2019. Included in the nine deals was two in St Helens.
There remains a low level of good quality supply as there is 39% grade A speculatively developed space, 7% second-hand grade A space, 28% grade B space and 26% grade C space.
For this reason, the firm expects prime rents to continue to grow and RealFor recommends 5.3% per annum for the next five years.
There are a number of industrial developments in the pipeline in and around Liverpool city region. Earlier this year the LCR Freeport went live and this is expected to fuel demand for logistics space in the next few years.
Last week Derwent won approval for an 83,000 sq ft industrial development in Knowsley and Redsun Project has applied for consent for a 50,000 sq ft industrial scheme at Knowsley Business Park.
And in June Parkside Regeneration, a joint venture between St Helens Council and developer Langtree, took another step forward with its plans for a £100m logistics hub at a former coal mine in Newton-le-Willows.
There are currently five units being speculatively developed in the North West, totalling 925,000 sq ft. Savills is tracking multiple other schemes that have achieved planning, however funding issues have caused them to be temporarily paused.
Should these units come to the market without being pre-let, the vacancy rate would rise to just 7.2%, which is still below the peak vacancy rate in 2019.
Jon Atherton, director at Savills, said: “The North West continues to be well balanced between supply and demand of industrial units.
“We have witnessed an uptick in supply, but we’re lacking the Grade A quality space in desirable locations to attract the right occupiers. We expect to see some significant transactions this year which should bolster end of year take-up figures for the region.”