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Investor and occupier demand remains strong in Yorkshire and the North East

24 03 22 Investor and occupier demand remains strong in Yorkshire and the North East hero

Commercial real estate firm publishes its latest Industrial and Logistics Viewpoint.

Latest research reveals that the Yorkshire and North East Industrial and logistics sector had a strong 2021 with demand for units sized 100,000 sq ft-plus reaching take-up levels of 7.5 million sq ft and 3 million sq ft respectively.

According to commercial real estate firm Colliers’ latest Industrial & Logistics Viewpoint, there is currently only one grade A unit immediately available of this size, demonstrating the demand and lack of supply currently available in the region.

Colliers highlights that while take-up in the Yorkshire market recorded a slight annual contraction in 2021, compared to a record take-up of 7.7 million sq ft for 2020, figures were only suppressed by a lack of available stock. 

In Yorkshire last year, investors delivered 1.4 million sq ft of speculative space across five units in excess of 100,000 sq ft, with the last unit of this phase of speculative development recently completing at the end of January, iP2F Iport Doncaster. This is the only unit currently available for immediate occupation in the Yorkshire region. Due to this absolute lack of space, Yorkshire prime warehouse rental growth is expected to reach 6.1 per cent this year and 4.8 per cent in 2023.

Robert Whatmuff Head of Industrial and Logistics in Leeds at Colliers comments: “The Yorkshire market witnessed a relatively active development programme in 2021 but one that was still well outstripped by demand. While the Yorkshire has not traditionally been seen as a region for speculative development, there has been a noticeable shift towards speculative build programmes for those sites that are deliverable and suitably infrastructure connected - occupier interest in deliverable sites is very strong.

Rental values have seen a significant increase over the last 12 months and this trajectory is continuing with the supply and demand imbalance. The current shortage of available quality space and insatiable occupier demand has driven the sector to the top of investors wish lists. The market shows no signs of slowing.”

The report explains how the Yorkshire market recorded a new record investment volume of £894 million, up 89.8 per cent year on year. Looking at investment activity in the North East, investors purchased a total of £144 million worth of industrial assets, an increase of 44 per cent year on year. 

The largest deal of the year occurred in Yorkshire when Arrow Capital Partners forward funded the Amazon pre-let 2 million sq ft warehouse for £233 million, a price reflecting a net initial yield (NIY) of circa 3.35 per cent in Q4. 

Amongst other key deals of the year, Kennedy Wilson Europe purchased a distribution warehouse of 215,728 sq ft let to Royal Mail at Wakefield Europort for £25.37 million at a NIY of 4.05 per cent and Total Developments sold Total Park (a multi-let scheme) in Leeds to Aberdeen Standard Investments for £24.8 million at a NIY of 3.43 per cent.

Looking at historical rental growth, the annual average rents for all sizes has risen by 7.9 per cent in Yorkshire and by 3.5 per cent in the North East. In 2022, we expect more rental growth to come due to new schemes coming online while demand for space to remain robust. This year, we envisage more single-let warehouse investment deals agreed at an equivalent yield between 3.75 per cent and 4.00 per cent and are expecting rents in excess of £7.25 per sq ft in Yorkshire to be agreed during 2022. 

Andrea Ferranti, Head of Industrial and Logistics Research at Colliers commented: “The performance of the UK industrial market is breaking records and investors are betting on the long-term performance of the sector. Prime warehouse rents will rise by 12.5 per cent in 2022 and 8.5 per cent in 2023. We predict that increasing rents, land values, construction costs, logistics and labour costs will not dissipate in 2022 and that occupiers will need to act quick to secure a deal. We expect there will be more bidding at uncomfortable levels and purchasers might need to consider speculative funding to seek higher returns due to yields being at historic lows.

“The warehouse of the future will require more highly skilled people, a robust power supply, a good pool of labour and also Grade A workspace to not only attract and retain talent but also investors. More ESG regulations will also be introduced which will further affect the sector from a cost perspective as investors seek to purchase net-zero properties and occupiers are required to adopt more sustainable technologies.”

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Related Experts

Rob Whatmuff

Head of Leeds Office

Industrial and Logistics


I have over nineteen years experience in all aspects of Agency Surveying with a particular specialism within the Industrial and Logistics field. I work with a range of institutional clients, corporate occupiers and developer/property companies providing strategic property advice, acquisition/disposal and development advice.

I have acted on behalf of both occupiers, landlords and developers on several key regional transactions including:

  • Acting on behalf of Lidl, acquired 35 acres at iPort Doncaster for a 685,000 sq. ft. Regional Distribution Centre.
  • Acting on behalf of Verdion on the iPort Doncaster scheme, the Yorkshire Regions most high profile and successful development, including leasehold occupier transactions to Amazon (2.1m sq. ft.), Fellowes (142,750 sq. ft.), CEVA (215,900 sq. ft.).
  • Occupier acquisition advice to companies including Lidl, Reckitt Benckiser, Dixons Carphone, ASDA, Ocado, Jaguar Land Rover, Magan, Siemens, Superdrug, Selco.
  • Development advice on behalf of leading developers such as Verdion, Tritax Symmetry, Peel Group, Network Space, Stoford Developments, Citrus Group and Highgrove Plc.
  • Acting on behalf of Aberdeen Standard, successfully let 415,000 sq. ft. at First Point, Doncaster to Amazon.
  • Acting on behalf of WP Carey, sold a former printworks complex in Leeds comprising 190,000 sq. ft. facility on a 4.88 acre site to Caddick Developments. Retained by the purchaser, the site was subsequently comprehensively reconfigured and refurbished, resulting in a letting of the whole to Leeds City Council.
  • Acting on behalf of Network Space, disposed of a 60 acre logistics development site in Worksop to DHL.
  • Acting on behalf of Dixons Carphone, acquired 425,000 sq. ft. at Leeds Bradford Airport Distribution Park.
  • Acting on behalf of Sainsbury Plc, disposed of the 400,000 sq. ft. former Argos RDC at Wakefield Europort.
  • Acting on behalf of Tritax Symmetry, acquired a 90 acre development site in the North East of England with subsequent pre-let of 1,507,000 sq ft RDC to Amazon on an institutional lease.
  • Acting on behalf of Glentrool, pre-sold 50,000 sq. ft. to Cromwell Polythene.
  • Acting on behalf of Wilton Developments, let 135,000 sq. ft. at Latitide 135 Wakefield to WH Malcolm and 50,000 sq. ft. at Connex 50 Leeds to FedEx.

Current Position - 2015 onwards - Director - Industrial & Logistics, Colliers International

Previous Positions:

2007 - 2014 - Head of Office & Director Industrial & Logistics North at Lambert Smith Hampton

2001 - 2007 - Senior Surveyor at King Sturge

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Andrea Ferranti

Director for Industrial Client Engagement

Research and Forecasting

London - West End

Head of Industrial & Logistics Research working closely with the Research & Forecasting team whilst supporting the Industrial and Logistics teams nationally in providing research and advises to clients. Andrea leads on the division’s key research papers which include, but not limited to, the Industrial & Logistics Barometer and the UK Speculative Development Map – both of which have become key benchmark publications highly valued by UK investors and developers alike.

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Kristy Watt

PR Executive


London - West End

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