The fragility of the retail market is preventing major distribution deals from completing in the North West, according to the Logistics and Industrial Spring Review from Colliers CRE.
Mike Walker, director at Colliers CRE's Manchester office, said: "There are two or three major unsatisfied inquiries for large distribution units in the North West but these have not as yet committed. The market really needs to see them happen."
As retailers and manufacturers have failed, the amount of available space in the market has risen to 25.7m sq ft among units over 50,000 sq ft. Take-up last year was 5.6m sq ft in this bracket. At that rate it would take five years for the supply to be absorbed, discarding any additional space coming to market in that time.
Retailers known to be looking for large distribution units in the region include Aldi, with a requirement for 600,000 sq ft around Manchester. The German supermarket group has land in Chorley that it has not developed and an existing unit in Stakehill. JD Sports has been linked with a move from Heywood to a new 600,000 sq ft at Wilson Bowden's Kingsway in Rochdale but no deal has been signed.
Colliers CRE added that rents are likely to see a slight decline in 2009; Trafford Park, Warrington and M60 locations will remain strong but secondary locations could see notable falls. Prime rents are £5.75/sq ft and secondary £4.25/sq ft, Colliers CRE said.
Walker said new speculative development was unlikely until the second half of 2010 due to the current oversupply.
The first quarter of 2009 has seen greater inquiry levels than the end of 2008, he added, with Internet retailers and waste/recycling firms seeing increased activity.