Take-up in the UK’s industrial sector hit record levels during 2018, with big box logistics occupiers signing for 31.5m sq ft.
This take-up surpassed 17.4m sq ft in 2017 and 29.3m sq ft in 2016, according to the latest findings from CBRE.
Regionally, the East Midlands was the top performer after accounting for 37.4% of take-up (covering 11.8m sq ft).
This was followed by Yorkshire and the North East, which saw take-up of 6.7m sq ft. Meanwhile new Grade A warehouses accounted for circa 75% of take-up.
By category, ecommerce businesses signed up for 10m sq ft of space, accounting for 32% of all take-up.
Combined with other retail types, business-to-consumer firms accounted for 52% of all warehouse take-up.
Third-party logistics providers accounted for 24.9% of take-up.
On the other hand, take-up in the automotive industry declined to 2.2% of all warehouse take-up, compared with 8.9% in 2017.
CBRE estimated there is 28.1m sq ft of lettable space, equivalent to under 12 months’ supply. Around 29% of this comprises buildings under construction, across 36 projects.
There are currently 67 buildings under construction with an aggregate floor area of 22.9m sq ft.
Of these, 28 (14.13m sq ft) are committed design and build schemes, while the remaining 39 (8.771M sq ft) are speculative.
Jonathan Compton, head of industrial & logistics strategy at CBRE UK, said: “2018 saw an increase of lettings of the XXL warehouses, which has given developers confidence to build speculative warehouses on a very large scale.
“Moreover, as the e-commerce sector continues to develop, we expect appetite for warehouse space, especially in urban ‘last-mile’ areas to remain strong.
“However, there remains a demand/supply imbalance that in normal market conditions would indicate continued and tangible rental growth going forward.”
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