Demand for industrial property in Yorkshire outstrips supply as take-up levels dip due to lack of space
Demand for industrial and logistics buildings in Yorkshire outstripped supply last year after take-up levels dipped due to lack of available space, a new report has found.
According to commercial real estate firm Colliers’ latest Industrial & Logistics Viewpoint, the region had a strong 2021 with demand for units sized 100,000 sq ft-plus reaching take-up levels of 7.5m sq ft, a slight dip on the previous year’s record 7.7m sq ft.
The report said that in Yorkshire last year, investors created 1.4m sq ft of speculative space across five units in excess of 100,000 sq ft, with the last unit of this phase of speculative development completing at the end of January, iP2F Iport Doncaster.
This is the only unit currently available for immediate occupation in the Yorkshire region, it added.
Due to this lack of space, Yorkshire prime warehouse rental growth is expected to reach 6.1 per cent this year and 4.8 per cent in 2023. The annual average rent for all sizes has already risen by 7.9 per cent in Yorkshire.
Robert Whatmuff, head of industrial and logistics at Colliers in Leeds, said: “The Yorkshire market witnessed a relatively active development programme in 2021 but one that was still well outstripped by demand.
“While Yorkshire has not traditionally been seen as a region for speculative development, there has been a noticeable shift towards speculative build programmes for those sites that are deliverable and suitably infrastructure connected.”
He added: “Rental values have seen a significant increase over the last 12 months and this trajectory is continuing with the supply and demand imbalance.
“The current shortage of available quality space and insatiable occupier demand has driven the sector to the top of investors wish lists. The market shows no signs of slowing.”
The report explains how the Yorkshire market recorded a new record investment volume of £894m, up 89.8 per cent year on year.
The largest deal of the year occurred in Yorkshire when Arrow Capital Partners forward funded the Amazon pre-let two million sq ft warehouse at Wakefield Hub for £233m.