An unprecedented shortage of industrial space in the UK has brought new significance to the speculative Apollo Park scheme in Bristol, according to a leading logistics expert.
Latest data from global real estate advisor Colliers International shows the UK has just over a year’s worth of industrial space left – just 1.3 years nationally, and even less in the South West where industrial availability has declined by 61 per cent since 2009 and just 1.2 years of supply remain.
Tim Davies, the Bristol-based head of South West Industrial & Logistics for Colliers International, said the figures showed the importance of speculative developments such as Apollo Park, on the established Great Western Industrial Estate in Yate, on the northern outskirts of Bristol, for which Colliers is agent.
It has been built speculatively by national logistics developer Chancerygate, and is strategically located on a 6.5 acre site with good access to Junction 18/19 of the M4 motorway, and Junction 14/15 of the M5 motorway, as well as for access into central Bristol via the A432/ M32.
Mr Davies said: “UK industrial availability has fallen on average 62 per cent since 2009, and industrial supply is likely to fall further due to continued demand from e-tailers, lower levels of speculative starts, and the loss of industrial commercial land for other uses such as residential.
“In this context, there is a new significance to Chancerygate’s visionary decision to develop Apollo Park on a speculative basis, as it brings much-needed industrial space to the Bristol area at a time when there is a regional and national shortage.
“While most other developers are seeking pre-let commitment, Chancerygate’s bold move has already been rewarded with the sale of all of Phase Two, totalling 60,000 sq ft, and the disposal of most of Phase One which totals 43,000 sq ft.”
The Colliers International Summer 2017 UK Industrial & Logistics Market Barometer shows that despite the reduction in availability and supply, just 17 million sq ft of industrial space is under construction.
There has been a 60 per cent decline in speculative completions since 2007, according to the data, with speculative industrial schemes now accounting for just 28 per cent of all UK developments under construction. Colliers predicts that completions will fall by 60 per cent in 2017, to 3.5 million sq ft.
The data also shows that industrial sector continues to attract strong investor interest, with investor volumes of £3.4 billion in the first half of 2017, exceeding the first half of 2016 by 13 per cent.
“Following the outcome of the European referendum, there has been stronger demand for industrial space from the manufacturing sector due to the weakening value of sterling encouraging a surge in demand for British goods,” said Bo Glowacz, Senior Research Analyst, Research and Forecasting at Colliers International.
“The sector now accounts for 27 per cent of the market, up from 19 per cent in 2016; second only to retailers and wholesalers who account for 33 per cent of demand.”