Demand for short-term industrial space surged in March as the first shock of COVID-19 was felt by the logistics sector, according to new data from Cushman & Wakefield.
However, the first three months of 2020 saw the usual churn of the logistics property market slow down dramatically, with take-up falling 32% as many occupiers paused their search for new floorspace.
Cushman & Wakefield’s Industrial Outlook revealed that despite the increase in demand for short-term space, total take-up of industrial space in the UK fell 32% to 5.5 million sq ft across 41 deals as many retailers operating in ‘non-essential’ sectors such as fashion and homewares temporarily close their online operations in response to employee health and safety concerns.
Cushwake say that while some long-term strategic requirements are still progressing, many have been put on hold.
The availability of industrial space edged up slightly during the first quarter of the year to 72.4 million sq ft and is up by 22% from the same period last year. The lockdown is also disrupting construction activity, with several speculative schemes paused or delayed. So far, 2.5 million sq ft has completed this year with another 4 million sq ft underway.
Some of the largest deals in the first quarter of 2020 include Tesco temporarily re-taking possession of two recently vacated properties in Middleton, North West (300,000 sq ft) and Milton Keynes (620,000 sq ft) to deal with a spike in orders.
Other deals which completed before the market went quiet in March, included: the letting of the former 546,970 sq ft Poundworld unit in Wakefield to The Range, and the letting of the largest speculative development in the North, 525 Haydock in Haydock (525,300 sq ft) to Kellogg’s.