The UK big box warehouse market paused in the three months to June, as a shortage of good properties caused retailers and third-party distributors to hold back on planned moves.
Data for surveyors Gerald Eve suggests the UK’s big box logistics market dipped by 19% in the second quarter of the year, compared to the first quarter.
Total take-up stood at 8.4 million sq ft, compared to 9.8 million sq ft in the first quarter. The second quarter figures were below the medium-term trend.
The largest individual deal of the quarter – indeed, one of the largest of the past ten years – was Primark taking 1.06 million sq ft at Islip and The Hut Group’s acquisition of nearly 800,000 sq ft across two buildings in Warrington.
However, with 13 million sq ft under construction due to be delivered this year or next, development is at its highest level since the 2008, with speculative development also increasing to just less than 2.5 million sq ft. under construction, and more on the way.
Richard Ludlow, Head of Gerald Eve’s Logistics Team said: “Availability is at very low levels, and development activity will slowly add to supply volumes over the next few years, but as things stand the lack of suitably high-quality space, crucially in the right regions, remains a significant constraint on the market. Current development activity will eventually increase occupier choice, but demand continues to outstrip supply and this does not dampen our view of continued positive rental growth."