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Retailers push warehouse demand

Retailers push warehouse demand

Retailers have helped push demand for warehouses to record levels.

Demand for prime UK industrial space has soared with take-up of the best new buildings hitting record levels over the last six months, according to the latest figures from DTZ.

Retailers make up more than half the demand, they say. But third-party logistics operators fell back, taking just one-fifth of the warehouse space let.

In the first half of 2014, take-up of industrial space, including buildings for engineering, food and non-food manufacturing, logistics warehouses and retail distribution centres, reached a total of 15.9m sq ft.

Just over half of this – 8m sq ft – was grade A buildings, the highest six month prime take-up figure on record.
Of the grade A take-up, 65 per cent was through build-to-suit deals, as the lack of good quality space is causing occupiers to consider this option over existing stock.

Already this year there has been 5.2m sq ft taken as build-to-suit projects, compared to 4.4m sq ft taken across the whole of 2013.
Separately, new figures from Cushman & Wakefield show total take-up of big box units in the North West of 1.81m sq ft. This includes all deals over 100,000 sq ft.

Chris Brown, associate at Cushman & Wakefield, said: “Design and Build deals accounted for 22 per cent of overall take up with just over 700,000 sq ft of take up coming from the deals to Aldi and MBDA at Harworth Estates Logistics North scheme. The remaining 82 per cent of transactions has put further pressure on the North West’s already depleted existing supply levels.

“The statistics emphasise continued occupier interest translating into tangible transactions in the North West and I believe we are set to exceed the five year average annual take up of 4m sq ft by year end. XL at Skelmersdale and Fusion at Trafford Park are strongly rumored to be under offer totaling around 680,000 sq.ft of space that is committed to, so there is a pipeline of deals we have visibility of and we have identified a further 2.1m sq ft of deals that we firmly believe will happen in 2014 giving a projected total of circa 4.6m sq ft.”

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