Search
Search

According to a survey undertaken by property advisor JLL, the East Midlands has been the most popular region for industrial and logistics companies who have relocated this year.

Across the whole of England, Scotland, Wales and Northern Ireland, the region claimed the highest number of lettings. 25% of the lettings of large sites across the UK were based in the East Midlands. The South West followed closely behind at 25%.

JLL Director James Keeton said: “Significantly, each of those regions secured a letting of at least a million sq ft in the first half of the year.

“Amazon took 1.05 million sq ft at Mountpark Bardon, which is due to complete in October, and The Range signed for 1.158 million sq ft at Avonmouth’s Central Park.

“The largest Big Box investment deal also happened in the East Midlands, when BNP Paribas REIM paid in the region of £120m for the Amazon distribution centre on behalf of a Korean investor.

“Retailers continued to drive demand for space, and the trend is now very marked for them to either open new fulfilment centres, or to consolidate existing distribution facilities into larger centres to increase productivity.

“We’re also seeing a strengthening of demand for ‘build to suit’ space because e-tail tenants have very specific requirements, and I’d expect that to continue once the market settles down.”

Keeton believes that the East Midlands’ popularity as a destination for logistics companies is due to its central location and labour pool.

“The infrastructure links are excellent, there’s a very strong and flexible labour pool, and being in the centre of the country always has advantages,’ he said.

“There has been recent rental growth, but we still see the market balanced in favour of investors and developers.

“For sure, there will inevitably be a period when developers, potential tenants and investors take time to reflect on their next move amid the political and economic uncertainty post-Brexit.

“However, the key driver for occupier demand in this sector has always been supply chain changes, reflecting how the relationships between retailers, manufacturers and other suppliers and their customers are evolving, and that will certainly continue to disrupt the sector.

“As always, disruption creates opportunities for developers who are cash-rich and fleet-of-foot, and for investors who back their knowledge of the market in the search for asset growth and capital gains.”