The North West of England saw rents jump by 10.6% for new buildings, and 14% for second-hand floorspace.
Colliers International says this compares with prime average rent for ‘big sheds’ in the United Kingdom as a whole rose by 3.7% to a national average of £6.22 per sq ft in the first six months - a return to pre-recessionary levels. But the North West experienced the highest regional rise of 10.6% to a current level of £5.88 per sq ft.
Rents in parts of the North West rose even faster. Warrington – a major logisitics location – saw rents soar by 13.6% compared to the first half of 2015.
There is currently just seven million sq ft of available space of units of more than 100,000 sq ft in the North West with the majority of that space being second-hand and of poor quality. Based on average take-up levels, the total availability of new and refurbished space of over 100,000 sq ft would be occupied in little more than five months.
This overall shortage of suitable product, even of second-hand quality, is forcing occupiers wanting to expand to entertain all available options.
Consequently, the North West of England saw a 14% rise in rent for second-hand units of 10,000 to 30,000 sq ft over the past year to an average of £5.00 per sq ft.
Take-up of available space throughout the North West in the first half of 2016 amounted to about six million sq ft of which 1.79 million sq ft involved units in excess of 100,000 sq ft – a level of transactional activity down on the first half of 2016 because of the lack of available locations.
John Sullivan (pictured), director, industrial & logistics at the North West offices of Colliers International in Manchester and Liverpool, said: “The fact that the North West outperformed all other regions in terms of rental growth in the first half of 2016 reflects the classic economic scenario of supply and demand – there is increasing demand in the region from occupiers facing an ongoing shortage of space and people are therefore willing to pay top dollar for what is available.
“Larger deal activity continues to be driven by the retail sector and this trend is set to persist as online retail and ecommerce fuels the requirement for warehouse and distribution space."