Build-to-suit warehouses on the rise

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Build to suit activity now accounts for more than half of warehouse take-up in the UK because occupiers cannot find the appropriate space in the right locations.

Of the 10.6 million sq ft taken up in warehouses exceeding 100,000 sq ft in the first half of 2012, 52 per cent were build-to-suit deals according to CBRE

Paul Farrow, Head of Industrial Leasing, CBRE said: “There has been a marked increase in design and build activity from occupiers and the erosion of prime supply in the UK market has slowed in the past six months. However, there is now an acute lack of quality logistics space available in the core markets. While the paucity of funding remains an impediment there are extremely compelling market indicators to support a much needed return of speculative development not least that only 8.3 million sq ft of grade A space remains.”

Prime logistics rents are stable, but occupiers should expect to pay a premium for design and build options, due to the bespoke nature of this type of development.

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