Demand for warehouses in Scotland remained strong in H1 2019 as take-up hits 360,966 sq ft (33,535 sq m), the strongest start since 2016 and representing a 180% increase on the full year figure for 2018, according to data from Savills.
While take-up has been strong, it has predominantly consisted of second hand units which accounted for 67% of all space transacted. 90% of the available units on the market in Scotland is within the 100,000-200,000 sq ft size category, just 11% of the total available space is of grade A quality. The supply of larger units of more than 100,000 sq ft has fallen by 14% since 2018 year end and now stands at 1.48 million sq ft across ten separate units.
The supply shortage in size and quality of available units in the region has led to vacancy rates hitting the lowest level ever recorded at 5.55%. There are still no units being speculatively developed over 100,000 sq ft in Scotland meaning vacancy rates are not expected to fluctuate in the medium term.
There has been a recent influx in the proportion of build-to-suit space totalling 33% of all space transacted in the first half of 2019.
Ross Sinclair, director in the business space team at Savills in Glasgow, said: “While demand continues to remain firm occupiers seeking specific required features may find that the existing lower quality buildings might not be able to fulfil their needs. Unless speculative development comes forward we expect to see more occupiers opting for the build to suit route.”
The largest deal in H1 2019 was Malcolm Logistics acquiring 240,966 sq ft at 16 Blackburn Road in Bathgate, Savills acted on behalf of the vendor. The largest unit on the market, which Savills is marketing, is Lidl’s Regional Distribution Centre at Deans Industrial Estate comprising 291,710 sq ft following the forthcoming relocation to their new 750,000 sq ft base in Eurocentral.