Industrial take-up down, rents and supply up 

Just over 4m sq ft of big shed deals were signed in the North West during 2023, down from more than 7m sq ft the year before, according to data from Savills. 

Nationally, take-up was down across the board except in Scotland and the East Midlands. Deals of note in the North West during 2023 include Victorian Plumbing taking 544,000 sq ft in Leyland and Stapleton Tyres and John K Phillips signing for a combined 377,000 sq ft in Warrington. 

While take-up dropped, the supply of space units bigger than 100,000 sq ft across the region soared by 83% in the last 12 months to 6.19m sq ft across 31 units. 

Given the five-year average take-up, this is equivalent to 1.13 years’ worth of supply in the region, according to Savills. 

Of this supply, 46% is Grade A speculatively developed space, 14% is second-hand Grade A space, 16% is Grade B space, and 24% is Grade C space. Currently, 79% of the stock within the North West does not reach the EPC B or above standard, according to Savills. 

Jon Atherton, director at Savills, said: “Savills has recorded an uptick in the available supply as second-hand space has returned to the market. However, many of these units are poor quality or in unsuitable locations for many occupiers.” 

Despite the rise in supply, vacancy rate remains low at 6.69%. However, this is expected to fall to 6.1% by Q2 2024. 

Rents also increased in 2023 and Savills highlighted the North West as having the largest rental growth of any UK region and forecasts rents to increase by 6.3% a year over the next five years. 

Atherton added: “The North West has continued to see increased rental growth, evidencing the continued strength of the industrial market.” 

The average deal size across 16 transactions in 2023 was 251,000 sq ft. 

The report also shows that manufacturers accounted for 22% of take-up and third-party logistics firms for 19%. Online retailers continue to remain active, accounting for 9% of all activity, Savills said.