The North West is fast-approaching a severe shortage of new industrial sheds, with just 1.4 million sq ft of speculative Grade A space left unlet, according to international real estate advisor Savills.
The data comes as Stoford, the developer behind the mighty new Amazon fulfilment centre at Manchester Airport, prepares to announce that it will expand into Widnes as the supply of speculative floorspace shrinks.
A 25-acre development site at Liberty Park, Widnes is part of the Mersey Multimodal Gateway (3MG) area, tipped for new warehousing. The new developments will be available on a build-to-suit basis, with units from 107,250 sq ft to 405,300 sq ft.
However, in a sign of changing economic times, the scheme will not be built speculatively. Instead, potential tenants will be invited to agree to bespoke development
Savills’ Big Shed Briefing reports that while seven speculatively developed sheds are currently on the market, this will decline rapidly by the end of Q1 as several are under offer or have exchanged.
The North West’s overall industrial supply appears robust at 7.1 million sq ft, the highest of any UK region, but Savills says 75% of this stock is Grade B or Grade C and much of the latter is no longer fit for purpose. In fact, the region accounts for 54% of all Grade C stock in the UK, highlighting the scale of supply concentrated there.
Across the whole of 2016, industrial take up totalled 4.2 million sq ft in the North West, which is 18% higher than the long-term average although 8% lower than 2015’s 4.56 million sq ft total. Grade A space accounted for 72% of the full year total, reports Savills, including four deals involving recently speculatively developed units. These totalled 865,000 sq ft (80,385 sq m) and were all let within six months of completion. The year’s largest deal was AO.com’s 386,000 sq ft (35,859 sq m) acquisition of Crossflow 380 in Crewe, although 77% of deals were in the 100,000 sq ft to 200,000 sq ft (9,290 sq m to 18,580 sq m) bracket.
Jonathan Atherton, industrial director at Savills Manchester, said: “The online retail sector was the most active in 2016, acquiring 1.1 million sq ft of industrial space in the North West, and we expect this to continue throughout 2017. Yet with just one unit over 100 currently proposed for speculatively developed in the region, Ma6nitude in Middlewich, we are likely to be facing a severe shortage of Grade A space in the very near future."