An unprecedented lack of industrial space in the UK has underlined the need for speculative development to address the chronic shortage in the Exeter area, 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 South West Head of Industrial & Logistics for Colliers International, said there was a need for logistics developers to build speculatively in Exeter to address the severe shortage of industrial space.

“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,” said Mr Davies.

“There are vast opportunities within the sector as it continues to perform well for investors with rising rental values and potential for further growth.

“The situation in Exeter is particularly chronic, with less than six acres remaining on the city’s most deliverable site at Matford Green, and with DHL and Amazon among companies with active requirements.”

Matford Green Business Park, for which Colliers International is acting jointly, has become an automotive hub for the South West with VW, Lexus and Toyota dealerships now operational, and Audi expected to complete later this year. Land Rover/Jaguar, Ford, Fiat, Jeep, Mazda and Alfa Romeo are also scheduled to open on the site.

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.”