The manufacturing sector was the most active in taking up North West industrial and logistics space during 2017, according to new research.
In its latest report, property firm Cushman & Wakefield predicts that decisions on industrial real estate in the UK will largely be driven by Brexit negotiations moving forward.
The agent says that industrial and logistics take-up in the North West reached 4.7 million sq ft during 2017, which was on a par with 2016 and slightly below the five-year average of 4.85m sq ft.
Manufacturing is said to have accounted for 42% of the total take-up last year, with plans announced towards the end of 2017 by German manufacturer Prowell to build a 328,000 sq ft build-to-suit (BTS) facility in Ellesmere Port seen as a vote of confidence for North West manufacturing post-Brexit.
The report comes as Chancellor Philip Hammond suggested that the manufacturing sector is “enjoying its longest unbroken run of growth for 50 years” during his Spring Statement yesterday (13 March).
Sam Royle, senior surveyor in Cushman & Wakefield’s logistics and industrial team in Manchester, says: “Speculative development across the North West has continued in core locations with another 1.2 million sq ft across seven buildings currently under construction, taking total availability of Grade A space to 2.5m sq ft.
“There is, however, little availability of new builds in the 200,000 – 300,000 sq ft size bracket. All the schemes under construction are below 200,000 sq ft with the exception of 375 at Logistics North, a 375,000 sq ft warehouse developed by First Panattoni and Exeter Property Group in Bolton and scheduled for completion in Q3 2018.”
Cushman & Wakefield expects the ongoing diversification of the UK’s logistics and industrial sector to create opportunities for investors, as it includes more multi-level, mixed-use and urban depot solutions.
Bruno Berretta, who deals with UK logistics insight and research at Cushman & Wakefield, adds: “Brexit negotiations will undoubtedly influence real estate decision-making among many occupiers, notably those with European supply chains and regions which have strong trading links with the EU. However, the growth in e-commerce will continue to benefit the sector, as internet sales account for an increasing proportion of overall retail sales.”