Demand for warehouses in Scotland passed 360,966 sq ft for the last six months, the strongest start since 2016 and an 180% increase on the full year figure for 2018, according to data from Savills.
Take-up has mainly consisted of second hand units which accounted for 67% of all space transacted. Of the available units on the market in Scotland, 90% is within the 100,000-200,000 sq ft size category, while 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 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.
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 the first half of 2019 was Malcolm Logistics acquiring 240,966 sq ft at 16 Blackburn Road in Bathgate, with Savills acting 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.
