SEGRO is to build its first speculative development at its 700-acre East Midlands Gateway scheme in Leicestershire as vacancy rates fall to their lowest levels since 2016.
The developer investor will create over 220,000 sq ft of modern warehousing which SEGRO will market to potential or existing customers. The building is scheduled to be ready for occupation in October 2021.
It is latest developer pushing forward with speculative development this year where it had not originally thought to do so. The move reflects the growing concern that there is not enough supply to satisfy demand following more than 50 million sq ft of take-up last year.
Savills’ head of Industrial and logistics research Kevin Mofid, said: “Warehouse take-up for Q1 2021 reached 8.8m sq ft, 34% above average. The bigger story though, I feel, is the fact that supply has fallen to 30.8m sq ft and vacancy to 5.4%, the lowest level since 2016.”
Andrew Pilsworth, Managing Director, National Logistics, SEGRO, said: “Including this speculative build, we currently have four units under construction, after which the park will be nearly 75% full. We’ll be working hard over the coming months to secure customers for the spec build and the remaining 1.5m sq ft of space.”
The facility at EMG will be developed to high sustainability standards, with the building achieving a BREEAM ‘Excellent’ rating and it will be a net carbon zero building.