2021: The Year Of The Sub 3.5% Yield Midland Shed?
Today it is mud, but tomorrow the sun rises on another 5M SF of logistics floorspace as work on-site gets underway at the 450-acre Segro Logistics Park Northampton Gateway.
The park, which will include a 35-acre railhead with the capacity for 16 trains a day, is the latest entrant to the Midlands shed scene.
Since summer 2020, Segro has been conducting enabling works at the site next to junction 15 on the M1 motorway. The first plots are expected to be available for buildings in late 2021, nicely timed for retailers and third-party distributors now pondering their medium-term growth plans. The completion of £190M infrastructure works, incorporating major upgrades to junctions 15 and 15a on the M1, is anticipated by the end of 2023.
Q4 2020 logistics take-up figures are still awaited, but they are expected to top Q3 take-up, which, according to Gerald Eve data, hit a record-high 15.8M SF, an increase of 10% on the previous record in Q2 and 29% above the five-year quarterly average.
Midlands brokers expect the shed market to hit new highs in 2021.
“We predict that logistics continues on its steep growth trajectory and dominates the property headlines resulting in record rental levels of £8/SF plus and yield compression where we will see major transactions at sub 3.5%,” Cushman & Wakefield Birmingham office head Scott Rutherford said.