However, the UK warehouse market saw a slump indemand for big box units after a busy final quarter of 2020.
Total take-up of ‘big box’ logistics units (above 100,000 sq ft) was 5.2m sq ft in Q1 2021. Of this, 34.5% was in the East and West Midlands, data from CBRE shows.
In the East Midlands Q1 take-up was sharply down on the final three months of 2020. Take-up dropped 65% to just under 1m sq ft compared to the previous quarter. In the West Midlands, take-up of logistics space was 800,000 sq ft in Q1.
This mirrors the national picture, where quarter-on-quarter take-up fell by 49%.
East Midlands availability at the end of Q1 totaled 5.4m sq ft, of which 84% is ready to occupy. Prime rents now stand at £6.95 per sq ft, having increased for the first time in more than a year.
West Midlands had 4.4m sq ft of available warehousing. Secondhand units account for the majority of the total (66%), with the remaining available space split between newly completed speculative units (23%) and speculative units under construction (11 per cent).
Like the East Midlands, the West Midlands also saw an increase in prime rents for the first time in more than a year, now standing at £7 per sq ft.
“Despite seeing lower levels of take-up, collectively the East and West Midlands continued to dominate the regional share of total space taken during Q1,” Luke Thacker, associate director in CBRE’s Midlands industrial and logistics agency team, said.
“Unsurprisingly, the majority of the take-up in the East Midlands was for both online and store-based retailers, reflecting the overall national take-up trend. However, contrary to previous trends, a huge 74% of take-up was for secondhand units, demonstrating occupiers’ needs to satisfy immediate requirements.
“In contrast, the majority of Q1 deals in the West Midlands were from third party logistics providers.”