Savills’ latest Big Shed Briefing shows take up of 371,511 sq ft in the East in H1 2024, marginally down year-on-year, but with expectations of a rise in H2.
The report suggests the East of England’s take-up over the next six months will go up as requirements have started to increase, with approximately 1.2m sq ft now under offer and set to exchange in H2.
Savills also highlights that the mid-box size range has continued to outperform expectations, highlighting sustained occupier demand. The report shows occupier demand has stemmed from third-party logistics firms, accounting for 66 per cent of all activity and food producers who have accounted for 34 per cent of activity.
A key deal in Q2 was with pub company Greene King, which agreed terms with Jaynic for 7.73 acres at Suffolk Park in Bury St Edmunds for its new brewery.
The Savills report confirms that supply of industrial and logistics space in the East of England has risen 18 per cent in the past 12 months to stand at 2.61m sq ft across nine units.
Based on the five-year average annual take-up, there is only 1.13 years’ worth of supply available in the region. Although East of England sheds has seen increased supply, Savills analysis shows that the peak of supply has been surpassed, and the vacancy rate is expected to fall to approximately 5.3 per cent by the end of the year.
In terms of specification, 21 per cent of space on the market is Grade A speculatively developed space – all of which is currently under offer – seven per cent is second-hand grade A space, 38 per cent is grade B and 34 per cent grade C space.
The largest unit currently on the market is Peterborough 736, offering around 736,000 sq ft of grade B second-hand space, which alone constitutes 28 per cent of the total available supply.
Savills notes that, despite the increase in supply over the past year, there is no new developments expected to be delivered in the market. Occupiers seeking space within the region must either go down the built-to-suit route to acquire space or acquire one of the nine existing units.
William Rose, director, commercial agency for Savills Peterborough, said: “Requirements within the East of England have surged in Q2 2024, particularly interesting given recent large-scale investments in the area.
“Consequently, all the top-tier vacant spaces are now under offer and are expected to finalise in Q3 2024. Given the region’s limited stock, the vacancy rate can vary rapidly, and we anticipate it will drop to 5.3 per cent by the end of the year.”
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