Big shed take-up drops to 45.7m sq ft
Take-up for large industrial and logistics locations in the UK fell by 16.6% to 45.7m sq ft during 2022 compared with the previous year, according to new research from Savills.
However, the agency’s latest Big Shed Briefing report, which covers sheds measuring more than 100,000 sq ft, showed 2022 has been the third-best year on record for the sector.
Researchers at Savills said the total was 49% above a long-term annual average. Before the pandemic, the average stood at 26m sq ft. A new take-up record was also set for the first half of 2022, reaching 29m sq ft.
Take-up for large industrial and logistics locations in the UK fell by 16.6% to 45.7m sq ft during 2022 compared with the previous year, according to new research from Savills.
However, the agency’s latest Big Shed Briefing report, which covers sheds measuring more than 100,000 sq ft, showed 2022 has been the third-best year on record for the sector.
Researchers at Savills said the total was 49% above a long-term annual average. Before the pandemic, the average stood at 26m sq ft. A new take-up record was also set for the first half of 2022, reaching 29m sq ft.
Supply stood at 25.6m sq ft across 131 facilities, reflecting a nationwide vacancy of nearly 4%. That in turn represented an increase of 85bps on 2021 year-end figures.
There is a further 20.8m sq ft of speculative development due for delivery across 2023 and into 2024, of which 12% is already under offer.
Third-party logistics providers accounted for 32% of all new leases signed in 2022, which researchers said was the highest proportion ever recorded. Within those locations, 86% were certified as grade-A, against a long-term average of just 60%.
Savills also noted evidence of a resurgence in manufacturing-led deals, which accounted for 10.7m sq ft of take-up, 62% higher than the long-term average. Researchers highlighted that businesses are seriously considering near-shoring as they firm up their supply chains in the face of increasing economic uncertainty.
More than a fifth (22%) of take-up was for second-hand units, the lowest level ever recorded. The report suggested that occupiers continued to seek modern, well-designed and well-located warehouse spaces. With ESG playing a greater role in requirements, Savills predicted that available grade-A stock will continue to be in high demand into 2023.
Kevin Mofid, head of industrial & logistics research at Savills, said: “While H2 has seen demand return to more normalised pre-Covid levels there are some interesting occupier trends starting to emerge, which we should see continue into 2023.
“Given the wider economic landscape, there is little doubt that the sector will continue to face challenges in 2023. However, occupier requirements remain strong and vacancy in all markets remain well below historical levels. Essentially, with occupiers continuing to look for grade-A facilities, we expect the market to maintain its equilibrium moving forward.”
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