Take-up of UK logistics space slowed in the first nine months of 2022 compared with activity in the same period in the previous two years, according to the latest data from CBRE.
At the end of Q3 2022, year-to-date take-up stood at 30.25m sq ft, which equates to 95.8% of the 2021 figure and 92.1% of the record-breaking 2020 figure.
Activity slowed in Q3, with leasing volumes hitting 7.67m sq ft – a 30% decrease on the 10.9m sq ft of activity recorded in Q3 last year. In the same period 10 fewer deals completed, with 29 deals getting over the line in Q3 2022 and 39 deals completing in Q3 2021.
Almost half of total take-up (46%) was for speculative space, followed by build-to-suit (34.7%) – secondhand accounted for the remaining 18.4%.
Third-party logistics companies dominated take-up, accounting for 56.3% of activity in the quarter, followed by retail (21.3%). The remaining 22.4% was split across supermarkets, manufacturing, motor and ‘other’.
Yorkshire & North East accounted for 27.1% of deal activity, followed by West Midlands (20.7%), East Midlands (19%), South East (16.3%), North West (9.3%) and the South West (7.5%).
Vacant available space increased from 5.73m sq ft at Q2 2022 to 6.51m at Q3 2022, due to a number of speculative buildings reaching practical completion during the quarter, but with only 21 built speculative units available, there remains a significant under supply.
Jonathan Compton, senior director, UK logistics at CBRE, says: “Despite the ongoing economic uncertainty, the logistics occupational market remains strong with a wide range of occupiers securing space across the country. The decrease in take-up this quarter points to a degree of normalisation in the market following a prolonged period of record-breaking numbers, however the under-offer pipeline signals towards another robust year for the sector.”
Annabel Nash, senior analyst, UK logistics research at CBRE, adds: “We have seen a significant shift in the type of occupier taking space following a dominant display from online retail. Third-party logistics providers are now leading the pack, accounting for more than a third of total take-up year-to-date.
“Ongoing supply chain and shipping disruptions are resulting in longer lead times, driving retailers to extend their stock profile in the UK. Therefore, companies that do not have the sufficient infrastructure are turning to third-party logistics providers for fulfilment on their behalf.”
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