Just 45 Days Of Big Shed Supply Left As Brexit Crisis Looms
Record third-quarter take-up has combined with sluggish development to take availability to an all time low, according to Colliers, who say the supply of new build units over 100K SF is now enough to last just a month and a half.
The unprecedented low comes as supply chain and logistics managers worry that a no-deal Brexit will mean a surge in demand for warehousing to cope with delays in the customs process. Key Brexit talks are understood to be taking place in private this week, although the publication of a key document on the Irish backstop and a negotiating visit to Brussels by Brexit Secretary Dominic Raab appear to have been shelved, The Guardian reports.
According to Colliers International’s latest Industrial & Logistics Barometer for Q3 2018 availability of industrial space over 100K SF has fallen on average by 71% in the last 10 years, with the South East and West Midlands (both 75%) amongst the worst affected. At the same time the number of speculative developments due for completion before the end of the year is below the annual four-year average (2013-2017) of 4.46M SF. It currently stands at 3.5M SF.
Take-up of industrial space over the 100K SF threshold, has continued to rise year on year with 23M SF transacted so far this year, up 3.7% on the same period in 2017. Total annual take-up levels for 2018 are expected to reach 29.9M SF by the end of the year, well above the seven-year average (2010-2017) of 27.3M SF and just short of the most recent record high in 2016.
“We are operating under a challenging planning system, whereby we are seeing the limited land that is available for development being earmarked for residential, due to continued pressure from Central Government to address that national housing shortage. As a result, not enough land is coming through for industrial and logistics development, severely diminishing the sector’s ability to meet the continued demand from operators,” Rosso said.
“Brexit and other macro-economic factors are still impacting decision making, but 2019 has 6M SF of large scale speculative development scheduled for completion, which should go a long way to address the current imbalance of supply and demand in the U.K.”
The data comes as California-based logistics developer Panattoni announces it is to build a 625K SF speculative M1 motorway warehouse scheme on a 90-acre plot near Northampton.
Three buildings ranging from 92K SF to 310K SF will be completed by the end of 2019. In addition there are two build-to-suit sites of 260K SF and 780K SF.