Take-up of industrial and logistics space in Yorkshire & Humberside rebounded in 2018 after a quiet 2017, reaching 2.1 million sq ft, while remaining 20% below the five-year average.
This is according to research from Cushman & Wakefield who revealed that, nationwide, the UK logistics market enjoyed a record-breaking year in 2018.
The year ended how it started, with a 360,000 sq ft pre-let at Logics Leeds. 2018 also saw the letting of a number of speculatively built units that had been vacant since 2016 such as Mountpark Wakefield (133,445 sq ft) and Helix at Gateway 36, Barnsley (75,200 sq ft).
Tom Erxleben, Surveyor in Cushman and Wakefield’s Leeds Industrial & Logistics team, said: “Take-up of industrial and logistics space in Yorkshire and Humber in 2018 rebounded after a quiet 2017, reaching 2.1m sq ft, 20% below the five-year average of 2.6m sq ft and in contrast with the national picture where average take-up was at a 10 year high.
“In large part this is due to a shortage of available Big Box space and a cautious reaction to speculative development after a very subdued take-up in 2017 when grade A take-up was less than 200,000 sq ft, prompting some occupiers with near term needs to look outside the region.”
He added: “The lack of Big Box supply in the region is being addressed with two 200,000 sq ft + units under construction: a 278,000 sq ft unit at G Park Doncaster, and Super G (259,000 sq ft) at Castleford, both scheduled for completion in Q2 2019.
“Developers have been encouraged by the growth in rents over the past year, a strong funding market and healthy level of enquiries. The evidence so far suggests Brexit uncertainty is not having any discernible impact on demand and there are good reasons for optimism in the region’s logistics sector for the foreseeable future.”
Jacques Esterhuizen, Associate in Cushman and Wakefield’s Investment team, added: “The industrial and logistics sector continues to attract strong investor demand from UK Institutions, Overseas and Domestic Private Equity, Property Companies and Local Authorities.
“Demand is underpinned by the robust occupational story, driven by the continued structural shift in occupational needs. As a result, in 2018 the Yorkshire Industrial market experienced its strongest year on record with over £500 million invested.
“A combination of low stock volumes and increasing investor appetite for prime assets has led to competitive tension and sustained pricing levels.
“Two standout deals for the year involve Aberdeen Standard Investment’s commitment to forward fund two separate distribution sheds at Muse Development’s Logic Leeds pre-let to Premier Farnell and a “Global Tech Company” for in excess of £100 million. Cushman and Wakefield advised ASI on both deals.”