The North West is fast-approaching a severe shortage of new industrial sheds, with just 1.4 million sq ft of speculative prime space left, according to Savills’ latest Big Shed Briefing.
The firm’s report said that while seven speculatively developed sheds are currently on the market, this will decline rapidly by the end of the first quarter as several are under offer or have exchanged.
The North West’s overall industrial supply appears robust at 7.1 million sq ft, the highest of any UK region, but Savills said 75% of this stock is Grade B or Grade C, and much of the latter is no longer fit for purpose. The region accounts for 54% of all Grade C stock in the UK.
Across the whole of 2016, industrial take up totalled 4.2 million sq ft in the North West, which is 18% higher than the long term average, but 8% lower than 2015’s 4.56 million sq ft total. Grade A space accounted for 72% of the full year total, reported Savills, including four deals involving recently speculatively developed units. These totalled 865,000 sq ft and were all let within six months of completion.
The year’s largest deal was AO.com’s 386,000 sq ft acquisition of Crossflow 380 in Crewe, although 77% of deals were in the 100,000 sq ft to 200,000 sq ft bracket.
Jonathan Atherton, industrial director at Savills Manchester, said: “The online retail sector was the most active in 2016, acquiring 1.1 million sq ft of industrial space in the North West, and we expect this to continue throughout 2017. Yet with just one unit over 100,000 sq ft currently proposed for speculative development in the region, Ma6nitude in Middlewich, we are likely to be facing a severe shortage of Grade A space in the very near future.”