A record amount of UK logistics space was under offer at the end of Q1 2021, totalling 16 million square feet across 55 units, according to the latest research from global real estate adviser CBRE.
This represents a 40 per cent increase compared with Q1 2020, which saw 11.5 million sq ft under offer over 23 units.
Total take-up for Q1 2021 was 5.2 million sq ft, compared with 6.4 million sq ft in Q1 2020. However, a total of 25 deals have completed in Q1 2021, more than double that in Q1 2020, signalling a higher volume of transactions across smaller units throughout the quarter.
At sector level, pure online retail continues to account for the largest proportion of take-up at 48.2 per cent, with some new players also taking logistics space for the first time. This reflects the response from the sector to the change in shopping trends brought about by the pandemic.
The North West led the regional take-up levels at 21.7 per cent. The South East, East Midlands and Yorkshire closely followed at 18.9 per cent, 18.5 per cent and 18.3 per cent respectively.
In Q1 2021 speculative take-up primarily drove demand, representing 53.6 per cent of take-up. Second-hand space accounted for 29.9 per cent of take-up, however, build-to-suit units dropped to the lowest level since 2011, accounting for just 16.4 per cent.
This shows that occupiers continue to concentrate on securing readily available space in line with their somewhat disrupted expansion plans. CBRE tracks all warehouses in excess of 100,000 sq ft in size and with an eaves height of more than 10 metres.
Jonathan Compton, senior director of UK industrial & logistics intelligence at CBRE, said: “Although total take-up was lower this quarter, the appetite for quality, well-located logistics sites has not halted and the record number of units under offer suggests there will be a strong Q2 ahead. The acceleration in speculative space under construction confirms the response from the supply side to meet this continuing demand.”
Jonathan Priestley, head of A&T occupier services of UK industrial & logistics at CBRE, said: “Vacant space that is ready to occupy is at a historical low. We have seen many schemes coming to the market that have occupiers already committed and waiting ahead of completion in anticipation of the continued disparity between supply and demand.”