Big players pile into region as demand for big units threatens to outstrip supply
- Credit: Archant
The East of England is seeing soaring demand for large industrial units — which is pushing up rents, a study has found.
Last year (2020) saw the second-highest take-up on record for the region as a diverse mix of employers secured units of up to 860,000sq ft in size, according to Savills’ Big Shed Briefing.
A total of 2.78m sq ft (258,270sq m) of industrial units of 100,000sq ft or more were snapped up — surpassing the highs of 2019. The highest recorded year was 2017 said Savills.
The field was dominated by food manufacturers — which accounted for 34% of the space — followed by third party logistics operations (3PLs) at 31% and online retailers at 13%. Out of the nine transactions, 75% were for Grade A space, the report found.
High profile deals included the sale of 42 acres of land at Suffolk Park to Belgian logistics firm Weerts. It plans to build an 870,000sq ft (80,825 sq m) unit on developer Jaynic’s business park off the A14 at Bury St Edmunds. When completed, it will be the largest single warehouse in Suffolk.
Other big transactions include the sale of a former 300,126sq ft (27,882 sq m) Philips Avent baby bottles factory in Glemsford to Malaysian cocoa manufacturer Guan Chong Berhad.
FDS, a Chinese firm specialising in online retail, has pre-let a 143,000sq ft (13,285sq m) unit at Port One in Great Blakenham, near Ipswich.
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But aside from a large 736,000sq ft unit at Kingston Park in Peterborough — which according to Savills represents about half of all big unit Grade A space available — there is currently “very little” speculative development planned for the region.
However, it said there were still build-to-suit opportunities at schemes including at Suffolk Park in Bury St Edmunds, Gateway 14 in Stowmarket, Eastern Gateway in Ipswich and Port One at Great Blakenham.
Savills Chelmsford business space team boss Phil Dennis said: “It is excellent news that the East of England continues to outperform, with some significant deals taking place in 2020.
“However, it is important to note that, unlike last year, there is hardly any development planned for the region meaning we are starting to see sustained rental growth. With considerable demand, particularly for Grade A space, it is crucial that we see spades in the ground in 2021 in order to sustain this level of take-up moving forward.”