The logistics and industrial market in the North West

Supply

• There is 5.6 million sq ft available in the North West across 30 separate units which is the highest amount of any region, although 62% of the available space is either grade B or C quality. There is weak occupier demand for this product which has resulted in poorer quality units staying vacant for long periods.

• Despite the North West having the most amount of supply in the UK, supply has actually been falling in the region. Current supply is 18% below the highs of 2016 where supply totalled 6.9 million sq ft. Furthermore with occupier demand being focussed predominantly on grade A space, there is only 1.06 years of grade A supply in the region. There are 11 grade A units available in the North West, with the largest being Middlewich 353 which comprises 353,102 sq ft.

Take-up

• After a sluggish start to 2018, transactional activity picked up in Q2 with take-up reaching 1.66 million sq ft by the end of the half year. This was on par with the H1 2017 but a 4% decrease on the long term H1 average. Occupier demand remains stable as there have been eight deals in the North West this year which is equal to the long term average.

• The largest deal in the North West was Movanto leasing 373,000 sq ft at Haydock Green which is being developed by Morley Estates. The only other deal above 300,000 sq ft was Royal Mail leasing 346,153 sq ft at Unit 1 Mountpark Omega, Warrington which was let prior to practical completion. This was the first unit let at the scheme after Mountpark had speculatively funded three new units at the Omega South development.

• Despite the North West having the highest amount of grade B and C space available in the UK, occupier demand has focussed on grade A space with 70% of the space transacted being grade A in H1 2018.

Development pipeline

• There is 1.47 million sq ft under construction across eight schemes, the largest being First Panattoni’s 375 at Logistics North, Bolton where 375,000 sq ft is being developed. The new development is fairly spread out across the region, with two schemes under construction in both Crewe and Bolton. The average unit size under construction is 184,083 sq ft.