Big shed take-up in the first half of 2017 was 35 per cent down on the second half of 2016, according to JLL’s UK Big Box Industrial & Logistics report.
Even so, occupier take-up was two per cent higher than the long term average. Grade A available supply rose in the first six months of the year, 24 per cent up on the end of 2016.
However, prime headline rents rose in a number of markets over the first six months of 2017.
Tessa English, associate director, UK Research, said: “Manufacturers were the most active source of warehouse take-up in the first half of this year, making up 35 per cent of the total, but retailers were comparatively subdued. Grade A availability increased over the first six months of 2017, following a pick-up in both new and good quality second-hand supply. Nationally, our vacancy rate ticked up from 5 per cent at the end-2016 to 6 per cent at mid-2017.”
Overall availability of big box supply represented a national vacancy rate of six per cent during the first half of 2017.
The Greater South East, South West, Wales, North East, North West and Scotland all have vacancy rates below the national average.
Richard Evans, lead director logistics & development, said: “There are a few large requirements in the market at present and we expect this to translate into deals during the second half of 2017, however overall we anticipate demand this year to be lower than last. With a dwindling vacancy rate of six per cent nationally at the end of June, we expect to see the continuing trend of occupiers signing for build to suit warehouse units.
“There will be some further big box speculative development this year but we expect that it will be at a lower rate than that delivered to the market in 2015 and 2016. Our forecasts suggest that distribution rents overall will grow by 2.9 per cent per annum nationally over the next five years, with growth stronger in core locations.”