A “shrinking availability” of larger warehouses and firms’ perusal of greener operations is causing demand in the South West industrial and logistics commercial property market, analysis has found.
Despite an uncertain outlook for real estate and the wider economy, the resilience of the regional market has “held firm” according to Avison Young.
A total of 36 deals for units were completed in Bristol during the third quarter. The report found these transactions mostly consisted of multi-let properties and a handful of smaller mid-boxes, with only three deals for units of more than 50,000 sq ft.
Take-up across the South West region during Q3 came to 514,465 sq ft, compared to a five year Q3 average of 256,175 sq ft.
Avison Young said that a lack of ‘big box’ availability was continuing to hinder take-up in Bristol, causing “a wall of occupiers” unable to to find what they require.
James Short, senior surveyor at Avison Young in Bristol, said: “Although national take-up levels year to date have fallen short of 2021’s total - 40.28 million sq ft - this has been driven not by the current economic climate but by a chronically undersupplied market.
“Availability of grade A space across the UK stands at 24 million sq ft, equating to only two months’ worth of supply based on demand of the last three years.”
Mr Short added that developers were now having to factor in environmental and social value-add into new build schemes, to ensure they have a “future-proofed product”.
“Landlords will look to capitalise on this demand by deploying additional grade A stock and further retrofitting existing stock as they progress towards the government’s Minimum Energy Efficiency Standard targets by 2030.”
Work on Unit G5, the 115,000 sq ft warehouse at the Horizon 38 business park in Filton is ongoing and is set to be ready for occupation in April 2023.
Developer Equation Properties has recently begun work on site at the Matrix49 project at Avonmouth, which is speculatively building out 130,000, 170,000 and 235,000 sq ft units.
Read next:
- £25m luxury Devon resort to be opened by hotel group next year
- Travelodge Wincanton's 'radical' hotel transformation nearly complete
- Gloucestershire cyber firm transforms 'castle' base into 'Star Wars-style' defence hub
- Bristol film and TV studios The Bottle Yard opens £13.5m facility
Like this story? Why not sign up to get the latest South West business news straight to your inbox.
