More than 34m sq ft of warehouse space was transacted across the UK in 2016 – a new record for the sheds sector – driven by online retail demand.
According to Savills’ latest Big Shed Briefing report, there were 135 transactions in 2016 equating to 34.6m sq ft – 400,000 sq ft more than the 2014 record of 34.2m sq ft.
The only UK region that saw a small decline in the amount of industrial space transacted was the North West, despite a 10% increase in deal volume overall.
As a result of strong take-up and muted speculative development, supply remains critically low at just 27.6m sq ft.
There are only 17 units currently under construction totalling 3m sq ft, and Savills calculates there less than a year’s supply left in the market.
Activity in the occupational market has been mirrored in the investment market, with £2.6bn of capital invested in the sector in 2016.
Savills head of industrial and logistics research Kevin Mofid said: “Continued structural change in all aspects of retail will see the logistics sector remain in the beneficiary in the short to medium term. Budget retailers remain in the market and new pure-play retailers are keen to build a logistics infrastructure.”
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