.jpg)
Only 1.24 years of supply left in the market
2.3m sq ft BTS which will be constructed for Amazon at Panattoni Park, Swindon
Take-up in 2020 has outperformed expectations. We’ve seen a diverse range of tenants acquire space, highlighting the strength of the market. Wales continues to see an increase in activity due to competitive pricing
Rob Cleeves, Director, Bristol
Supply
The level of supply in the market has remained steady over 2020 currently sitting at 3.79m sq ft across 17 separate units, an 11% increase on last year. There is now just 1.24 years worth of supply in the market given the five-year average annual take-up. Furthermore, with c.415,000 sq ft currently under offer and only one unit under construction, we envisage the level of supply and vacancy rate throughout the region, decreasing in the short-to-medium term. At just over 1m sq ft, Imperial Park in Newport continues to be the largest unit on the market.
The quality balance is heavily skewed towards lower-quality units with just 12% of available space classed as Grade A, 56% is Grade B, and 32% Grade C. Additionally, by unit count, the supply continues to be dominated by smaller units with 71% being within the 100,000–200,000 sq ft size band. There are three units available above 300,000 sq ft, all of which are of second-hand quality.
Take-up
Take-up in the South West and Wales market totalled 3.86m sq ft, a 433% increase on 2019, and 27% above the five-year average annual. Adhering to regional trends, deal volumes have centred around the smaller size bands with 82% of the deals by unit count being within the 100,000–200,000 sq ft range. There was a single deal within the 200,000–300,000 sq ft size band, and one above 500,000 sq ft. The largest deal this year was Amazon committing to a 2.3m sq ft unit at Panattoni Park Swindon.
Occupier demand continues to revolve around better quality units with 64% of deals involving Grade A units. Our data suggests that the lack of good quality supply is pushing occupiers towards the build-to-suit route as 76% of space transacted in 2020 was built-to-suit.
Development pipeline
There is currently a single unit under construction in the wider region: Bristol 360, which is being developed by Mountpark. The unit will total 360,000 sq ft and is set to reach practical completion in H1 2021.
Read the articles within Big Shed Briefing below.
