The Midlands recorded the largest regional share of logistics take-up in the UK during the first quarter of 2021, new research from CBRE has revealed.
Total take-up of ‘big box’ logistics units (above 100,000 sq ft) was 5.2m sq ft in Q1 2021, of which 34.5 per cent was in the East and West Midlands.
In the East Midlands, following exceptionally strong demand for space in 2020, Q1 take-up dropped 65 per cent to just under 1m sq ft compared to the previous quarter. This mirrors the national picture, where quarter-on-quarter take-up fell by 49 per cent.
Availability at the end of Q1 totalled 5.4m sq ft, of which 84 per cent is ready to occupy. Prime rents now stand at £6.95 per sq ft, having increased for the first time in more than a year.
In the West Midlands, take-up of logistics space was 800,000 sq ft in Q1, with availability of 4.4m sq ft. Secondhand units account for the majority of the total (66 per cent), with the remaining available space split between newly completed speculative units (23 per cent) and speculative units under construction (11 per cent).
Like the East Midlands, the West Midlands also saw an increase in prime rents for the first time in more than a year, now standing at £7 per sq ft.
In terms of investment volumes, the West Midlands was the second most active region, with a 30 per cent share of the deals in Q1. Among them was the £99.76 million acquisition of the 670,348 sq ft Pets at Home unit in Stafford by Tesco Pension Fund.
Luke Thacker, associate director in CBRE’s Midlands industrial and logistics agency team, said: “Despite seeing lower levels of take-up, collectively the East and West Midlands continued to dominate the regional share of total space taken during Q1.
“Unsurprisingly, the majority of the take-up in the East Midlands was for both online and store-based retailers, reflecting the overall national take-up trend. However, contrary to previous trends, a huge 74 per cent of take-up was for secondhand units, demonstrating occupiers’ needs to satisfy immediate requirements.
“In contrast, the majority of Q1 deals in the West Midlands were from third party logistics providers. With strong demand for logistics space in the Midlands and a healthy supply of ready to occupy units, we’re anticipating a busy period ahead.”