The availability of space equates to 3.81 years’ worth of supply and represents a vacancy rate of 12.01%, up from 8.32% last year. The subdued take-up activity and ongoing return of lower-quality stock has resulted in Scotland continuing to see negative net absorption.

Savills says that the lack of available Grade A space, either new or refurbished, is significantly restricting the options for modern occupiers under sustainability pressure. There were no deals in the big-box market in Scotland in the first half of the year, although interest from occupiers remains strong and viewings continue. The flight to quality has meant a reluctance for businesses to settle for the low-grade units that comprise most of the current supply.

Although there are no sites currently under active construction, a development totalling 200,000 sq ft at Eurocentral Gateway has achieved planning. This is a two-unit speculative development project in North Lanarkshire, consisting of a 121,264 sq ft building, alongside a smaller mid-box unit. That could potentially pave the way for further development as occupiers compete for the limited Grade A units available.

Ross Sinclair, director in the industrial & logistics team at Savills Scotland, comments: “Despite a modest increase in availability and vacancy, this is from existing lower-grade, second-hand space. Scotland’s logistics market is therefore still fundamentally undersupplied, with occupier demand increasingly focused on high-quality, ESG compliant Grade A space.”