Research article

The logistics and industrial market in Yorkshire and the Humber

Article

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Abstract

With constrained existing unit supply and a strong development pipeline we expect quoting rents to exceed £6 in the next 12 months

Sheffield 615 which Logicor have leased to Clipper Logistics

Sheffield 615 which Logicor have leased to Clipper Logistics

Table 5

TABLE 5 | Key stats
Source: Savills Research

Supply

  • At the end of H1 2018 there was 2.5 million sq ft available which is the lowest amount on record. Of the 10 deals that were recorded in H1 2018 all involved existing units and there have only been three units added to the market which has resulted in the supply shortfall. Furthermore there are only two units available over 200,000 sq ft, the largest being Enterprise Park, Sherburn, where 405,662 sq ft is being marketed.
  • As a result of the strong occupier demand, there are only four grade A units available, the largest being IP2e Iport which comprises 195,000 sq ft. The unit was speculatively developed by Verdion and achieved practical completion in Q2 2017.
Figure 15

FIGURE 15 | Supply by size
Source: Savills Research

Take-up

  • The region has experienced strong levels of transactional activity in H1 2018. There was 2.9 million sq ft transacted in H1 2018 in Yorkshire which was higher than the half year amount for 10 of the previous 11 years. Furthermore H1 2018 take-up was 294% above H1 2017 and double the long term average.
  • Additionally the North East has had a stellar half year with 2.0 million sq ft transacted. This has been primarily driven by Amazon leasing 1.5 million sq ft at Symmetry Park scheme in Darlington. There were also three other deals over 100,000 sq ft in the North East highlighting the strong occupier demand in the region as there hadn’t previously been a deal since 2015.
  • Focussing on Yorkshire the rise in take-up has been a combination of an increase in the number of deals and larger lettings. There were ten deals recorded in H1 2018 which was 67% above the long term average and there were four deals above 300,000 sq ft The largest deal in the region was Clipper Logistics leasing 615,000 sq ft at Sheffield 615 which was the largest letting of an existing unit across the UK.
Figure 16

FIGURE 16 | Take-up
Source: Savills Research

Development pipeline

  • Developers are responding to the lack of grade A supply, there are six units under construction totalling 1.1 million sq ft. The largest unit is at G Park Doncaster where IDI Gazeley are developing 275,300 sq ft. The average unit size is 178,988 sq ft and the majority of the new development is concentrated in the Doncaster area with four units under construction.
Figure 17

FIGURE 17 | Speculative announcements
Source: Savills Research