No new stock
Big warehouse sector relying on secondhand sheds
There is a shortage of big units
Investors and occupiers seeking big warehouses in Scotland are having to rely on secondhand stock.
The supply of warehouse space for units larger than 100,000 sq ft has slumped and is forcing up rents.
According to Savills latest Big Shed Briefing the total available space now stands at just 1.25m sq ft.
It notes that, due to a lack in supply of new warehouse space over 100,000 sq ft, the current available space is made up entirely of secondhand stock.
Ross Sinclair, industrial director at Savills Glasgow, said: “The Scottish industrial market is witnessing a substantial supply / demand imbalance for good quality stock over 100,000 sq ft which, due to a stagnant development pipeline, looks set to continue.
“Whilst this has helped to keep the vacancy rate down as well as reducing incentives and increasing rental growth across the wider markets, only new speculative developments coming to the market will help to ease this critical shortage of stock.”
Rents for industrial units above 100,000 sq ft in Scotland have increased by 13% this year to £6.50 per sq ft. Savills expects this could rise further as demand for this type of space remains competitive.
In terms of take-up in the first half of the year, Savills reports that this reached 550,000 sq ft, which is 22% down year-on-year and was achieved through a single transaction that saw HarperCollins commit to a build-to-suit unit at Nova Business Park in Glasgow.
Looking forward, those occupiers looking to acquire space will have limited choices of lower quality and smaller sized units due to the shortage constraints of larger sized, high quality properties.