Apart fromthe region’s significant manufacturing capacity, the West Midlands is a key location for the fast expanding logistics industry.
According to JLL, last year it saw the second highest annual take up of logistics space in the past 10 years but new space is setting an absolute record. Total logistics space let was 2.14 million sq.metres (23.9 million sq.ft.), up 38% on 2015.
JLL’s Richard Evans said: “The retail sector provided the most active source of demand last year and accounted for 58% of the Grade A space. Demand remains high for large buildings, indicating another strong year."
Cushman & Wakefield noted the buoyancy of the West Midlands market for new space and the letting of 557,400 sq.metres (6 million sq.ft.) in the first nine months of 2016 led by Jaguar Land Rover (JLR), the automobile sector has been the most active leaser of new space.
Simon Lloyd of C&W said: “The UK is at the forefront of the growth in e-commerce which is accounting for an ever increasing amount of sales.” An example of such deals was the letting of space at M&G’s Birmingham Gateway to WE Deane, a freight forwarder, capping a strong recent performance there. The deal was handled by C&W and Savills.
Of course, the response among developers has been to build new space, such as Barwood and First Industrial at Walsall Road, just north of Birmingham city centre. This is a 9,297 sq.metres (100,075 sq.ft.) warehouse named Birmingham 100.
Barwood’s Edward Henson said: “There is very little supply of newly constructed warehouses, strong demand for such space and a large workforce catchment."
One of the largest players in the industrial market, Tritax Big Box REIT, has been particularly active.
Typical of its deals is the funding of two warehouses totalling close to 92,900 sq.metres (1 million sq.ft.) at Warth Park, Raunds and pre let to Howdens. The developer will be Roxhill.
AT Prologis Park, Fradley, Staffordshire, Tritax has forward funded 52,211 sq.metres (562,000 sq.ft.) which is pre let to Screwfix and developed by Winvic Construction. The other major Tritax deals in the Midlands saw it pay £115.5 million for two industrial facilities, one at Birch Coppice and let to Euro Car Parts and the other, at Warth Park, let to Whirlpool.