Research article

North West

2017 saw a similar number of transactions as 2016, but with a lower average size of deal we saw an reduction in take-up. With a number of large scale requirements in detailed discussions we are forecasting a strong year in 2018

▲ 375 at Logistics North

Supply

■ The North West remains the market nationwide with the highest amount of supply at 5.89m sq ft across 34 separate units, with the unit size averaging 173,000 sq ft.

■ The good news however is that the quality balance of the supply has slowly been shifting. For example, Grade A stock now makes up 30% of all units on the market, accounting for 1.75m sq ft, up from 15% of the market in 2016. However, based upon recent take-up levels of good quality units, the region has just 1.5 years worth of supply for Grade A units, the lowest of any region outside of the M25.

■ The level of poor quality stock has also decreased: Grade C units now account for just 0.96m sq ft of supply compared with 2.65m sq ft of supply in Q2 2016. Whilst there has been some occupier demand in this category landlords have also chosen to withdraw or refurbish this stock which has little occupational demand.

Figure 12

FIGURE 12Supply by grade

Source: kamaco Research

Take-up

■ Occupier demand in the region reached 2.70m sq ft across 15 units. Whilst this level of take-up also falls below the long term average of 3.50 sq ft it should also be noted that the amount of deals stood at 15, which is broadly in line with the long-term average demonstrating that there is still a strong level of churn in the market.

■ This is borne out in the analysis of the market as in 2017 second hand units accounted for 64% of all deals compared to the long-term average of 44%. The level of build to suit fell to its lowest level since 2009 at just 327,000 sq ft, which ultimately has contributed to the below average take-up.

■ The average size deal fell to 167,000 sq ft in 2017, which was not helped by the fact that the largest deal of the year was 368,000 sq ft at Skelmersdale M58 which was taken by Accroll Papers.

Figure 13

FIGURE 13Take-up by grade

Source: kamaco Research

Development Pipeline

■ There are five units currently under construction in the region which total 0.87m sq ft.

■ All are sub 200,000 sq ft aside from 375 at Logistics North which is being developed by First Panattoni and Exeter Property Group and due to complete in the fourth quarter of 2018.

Figure 14

FIGURE 14Development pipeline

Source: kamaco Research

Table 4

TABLE 4Key stats

 

Other articles within this publication

11 other article(s) in this publication

Key contacts

Simon Smith

Simon Smith

Senior Director / Head of Research & Consultancy
Research & Consultancy

Two Exchange Square

+852 2842 4573

 

Subscribe to kamaco research

 

Would you like to be notified via email about new research?