Large unit warehousing take-up was relatively low in 2012
25 February 2013
The take-up of larger warehouse units in 2012 was the lowest in recent years (except for 2009) but saw an uplift towards the end of the year, according to a report from property investment firm Jones Lang LaSalle.
Take up in 2012 was 11.9 million sq ft, down from 13.1m sq ft in 2011 and 24.8m sq ft in 2010, but greater than 2009’s figure of 10.9m sq ft.
The first half of the year saw 4.1m sq ft occupied, but almost double that was occupied in the second half (7.9m sq ft).
Despite weak demand, availability of space was squeezed by around 15% in the second half of 2012. The report says at the end of December Grade A availability totalled around 22.1 million sq ft, of which 8.3 million sq ft consisted of new speculatively built floorspace, with the remaining good quality second-hand floorspace.
The figure of 8.3 million sq ft of new floorspace available is the lowest level on LaSalle’s records dating back to 2005.
According to the report, Build to Suit was a more popular option than spec built properties in 2012, with 4.9m sq ft recorded for build to suit, and 2.1m sq ft recorded for spec build.
The company said: "Given the diminishing level of new supply, we believe 2013 could see a selective return of big box speculative development, with up to two million sq ft of space being considered for speculative development nationally at the start of the year.
"However, not all of this may proceed. There have been examples recently of sites where speculative development was planned but where pre-let deals were concluded prior to development proceeding.”