The North West industrial market can expect to see rents nudge up as the supply of good modern warehousing continues to grind down.
Data from CBRE and Savills shows that the region’s warehousing sector is booming, with the region's big-box take-up soaring by 63% during 2018.
According to the latest Savills Big Shed Briefing, based on the long-term average take-up of quality space, the supply in the North West will last less than 18 months.
In 2018, take-up of industrial units of more than 100,000 sq ft reached 4.58m sq ft across 23 separate transactions. Most of the deals were for units of 100-200,000 sq ft.
Despite current underlying uncertainty the outlook for the year ahead is positive, say Savills, and take-up for 2019 is expected to exceed the long term average of 3.65 million sq ft.
Simultaneously data from CBRE shows that 49% of all the floorspace let was Design to suit and speculative development.
CBRE anticipates demand to continue through 2019; predominantly led by the online retail sector which accounted for more than 31% of UK Logistics take up in 2018. Third Party Logistics operators (3PLs) were also very active in 2018, and together with the online sector, accounted for more than 50% of transactions.
CBRE expects demand for developments in this size bracket to continue together with an increase in demand for larger units of 500,000+ sq ft.
Steve Capper, Director at CBRE Manchester, commented: “The outlook for 2019 is positive. With demand strong in January, developers are continuing to commit to new schemes and upwards rental pressures are continuing due to the restricted supply."