The logistics market in Scotland

Supply

The supply of warehouse space in Scotland for units larger than 100,000 sq ft has fallen by 9% from the end of 2019 to stand at 1.34 million sq ft through nine separate units.

The supply continues to be dominated by second hand space with no new units available. Just 12% of the supply is of Grade A quality with the remainder being Grades B & C.

Additionally, 89% of the available units on the market are within the 100,000–200,000 sq ft size band. There is just one unit within the 200,000–300,000 sq ft size band. The decrease in the amount of supply in the region has caused the vacancy rate in Scotland to now stand at 6.27%.

The largest unit on the market is still the Springburn Rail Depot providing 279,303 sq ft of Grade C second hand space.

Take-up

Take-up of units in H1 2020 reached 704,531 sq ft through four separate transactions, representing a 165% increase on the long-term H1 average and a 95% increase on H1 2019. Take-up has entirely consisted of second hand units, this is primarily because there are no new speculatively developed units in supply.

Again perhaps hindered by the available units in supply, take-up has revolved around the 100,000–200,000 sq ft size band which has accounted for 75% of deals and the 200,000–300,000 sq ft size band 25% of deals.

Take-up continues to be constrained by both shortages in the size and quality of available units throughout the region; occupiers are having to settle for lower quality units to satisfy their requirements.

Development pipeline

There are still no units being speculatively developed over 100,000 sq ft in Scotland. As take-up increases, we expect a stable or declining supply which will keep the vacancy rate low in the short to medium term and, in turn push on rental growth.

_{Read the articles within Big Shed Briefing below.}