Strong take-up of big sheds in the third quarter has resulted in an all-time low in availability, according to Colliers, and there is only one and a half months’ supply of speculative units over 100,000 sq ft to meet current market demand.
Availability of industrial space over 100,000 sq ft in size has fallen on average by 71 per cent in the past ten years, Colliers International’s Industrial & Logistics Barometer for Q3 2018 reveals.
Wales (down 85 per cent), the North East (down 76 per cent), the South East and West Midlands (both 75 per cent) are among the worst affected.
In addition, the number of speculative developments due for completion before the end of the year is below the annual four-year average (2013-2017) of 4.46 m sq ft; currently standing at 3.5 m sq ft.
Take up of industrial space over the 100,000 sq ft threshold, has continued to rise year on year with 23 m sq ft transacted so far this year, up 3.7 per cent on the same period in 2017. Total annual take-up levels for 2018 are expected to reach 29.9 m sq ft by the end of the year; which is well above the seven-year average (2010-2017) of 27.3 m sq ft and just short of the most recent record high in 2016 (32.2 m sq ft).
“The market is in good shape and we’re on track for another strong year of deals activity, so it’s no wonder we’re seeing availability levels continue to fall year on year.
Len Rosso, head of industrial & logistics for Colliers International, warned that a severe lack of available development land across the UK is continuing to impact the sector.
“We are operating under a challenging planning system, whereby we are seeing the limited land that is available for development being earmarked for residential, due to continued pressure from Central Government to address that national housing shortage. As a result, not enough land is coming through for industrial and logistics development, severely diminishing the sector’s ability to meet the continued demand from operators.”