Supply

An increase in speculative development completions, paired with large units returning to the market has seen current supply reach 6.27m sq ft representing a rise of 91% from 2018. However, as stock levels have also increased due to strong levels of BTS take-up vacancy remains stable at 5.74%, a rise of just 91bps in 2019.

Using the five-year take-up average there are just 0.93 years of supply within the region, however, if we excluded BTS from the take-up average, this rises to 2.5 years. The largest available unit on the market is Nottingham 550 totalling 550,000 sq ft, speculatively developed by Panattoni. This unit is rumoured to be under offer and should a deal complete in Q1 2020 the void period would be less than 12 months.

Interestingly the proportion of Grade A supply has decreased throughout 2019 and now accounts for 63% of supply, down from 74% in 2018.

Take-up

A record 9.57m sq ft of space was taken on new leases in 2019, up 3.8% on 2018. This included the largest ever warehouse deal signed in the UK where JLR committed to 2.9m sq ft across a campus of buildings at IM properties Mercia Park in Ashby de la Zouch.

Whilst this deal ensured BTS units were the dominant type of transaction in 2019, it should be noted that of the 20 separate transactions recorded 20% were for speculatively constructed units, the largest being Northampton 310, taken by Eddie Stobart in June 2019. This was one of the three units Eddie Stobart took at Panattoni Park Northampton together totalling 623,000 sq ft.

Development pipeline

There are currently five units under construction which total 1.56m sq ft. The largest unit currently under construction is IM properties Hinckley 532, which completes in Q1 2020 and is rumoured to already be under offer.

_{Read the articles within Big Shed Briefing below.}