Research article

The logistics and industrial market in Scotland

Article

Contacts & Related Research

Abstract

Whilst supply has increased, this is skewed by the sizeable Lidl RDC, as otherwise supply has been reduced by the recent purchase of Vertex and letting of Colossus 1. Meanwhile no new build and very little other facilities of scale and quality have entered the market meaning that the Scottish Region is in much need of speculative development

Lidl unit at Deans Industrial Estate which is marketed by Savills

Lidl unit at Deans Industrial Estate which is marketed by Savills

Table 8

TABLE 8 | Key stats
Source: Savills Research

Supply

  • The supply of warehouse space in Scotland for units over 100,000 sq ft has risen by 25% in 2018 and now stands at 1.57m sq ft across the Central Belt.
  • This is made up of 10 separate units of which all bar two are between 100,000 and 200,000 sq ft, with the average size being 156,934 sq ft.
  • The largest unit on the market in Scotland at present is the former Lidl unit at Deans Industrial Estate which totals 291,710 sq ft, which came to the market in the second quarter of 2018. This follows the purchase of 50 acres by Lidl at Eurocentral where a new 750,000 sq ft Regional Distribution Centre is currently under construction due for occupation in 2020.
Figure 24

FIGURE 24 | Supply
Source: Savills Research

Figure 25

FIGURE 25 | Supply by grade
Source: Savills Research

Take-up

  • The deal flow for units over 100,000 sq ft in Scotland this year has been subdued with just one unit transacted so far this year.
  • Drinks manufacturer BrewDog have completed the acquisition of the Vertex building at Eurocentral near Motherwell.
  • The 128,000 sq ft unit sold for a capital value of £60 per sq ft.
Figure 26

FIGURE 26 | Take-up
Source: Savills Research

Development pipeline

  • There are no units under construction speculatively over 100,000 sq ft in Scotland meaning we do not expect vacancy rates to fluctuate in the medium term.
  • However, with the recent changes to the Scottish business rates regime, it is hoped that developers and investors will now be able to bring forward much needed grade A space to the Scottish market.