Demand for warehouses and industrial units is increasing in the South West as retailers move operations from the high street to out-of-town industrial estates, a leading property consultancy says.
Experts at , the largest multi-disciplinary surveyor in the region, said demand for warehousing has jumped during the Covid pandemic as online shopping has grown.
And there is a hunger for smaller work units too, as people set up businesses at home and then found they needed more space.
Will Oldrieve, head of Vickery Holman’s Truro agency, said that despite some issues caused by Brexit, the industrial property market has been “a top performer over the past 12 months”.
He said demand has “significantly increased” for small and large units, although it stayed fairly static for medium-sized units in the 5,000-10,000sq ft range.
Above and below this range there is an appetite for space and Mr Oldrieve said: “Demand has always been hight but the pandemic has pushed this particularly in the retail and logistics occupiers.
“We have seen a number of retailers swap the high street for industrial estates as online shopping has increased meaning a physical presence on a high street, or similar prominent position, is no longer critical but good access and efficient open workspaces are.
“The rise in online retail goes hand-in-hand with logistics and delivery businesses, so we have seen growth in this sector and some fairly large requirements in the market for good-quality distribution facilities of which there are a few options around.”
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He added: “The lockdowns have pushed people to focus more on creating businesses that work from home, either out of boredom or necessity, and soon realised they did not have enough space at home so require a small workshop.
“On the other end of the scale there is good demand for very large units, 100,000sq ft-plus facilities, and we believe this is more supply driven as previously there has been no options available, but now a few opportunities are coming to the market, a number of large requirements are coming out of the woodwork, seeing a one-chance opportunity of securing a large facility, not knowing how long it will be before another will come along.”
Mr Oldrieve said there has been consistent lack of supply across the region particularly in the smaller unit sizes, which is particularly bad in Exeter where there are only 12 industrial units available on the market in March 2021.
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“This lack of supply has only increased during the pandemic as construction was put on hold in the first lockdown and sourcing building materials has been difficult and not helped by Brexit,” Mr Oldrieve said. “In Cornwall a lot of developments were previously funded using EU grants which have also now dried up, so funding has become more difficult in this area.”
But he added: “Demand will continue to remain high, we will likely see more supply coming to the market as construction gets back on track, so we will see more balance within the market.”
He said that among notable transactions in the past year there had been a number of deals in Bristol including Peugeot moving into a 45,000sq ft letting at Park Access 18, and SIG Roofing and Network Rail taking units of 32,000sq ft and 42,000sq ft at Avonmouth Severnside, while a 63,000sq ft unit was let to Argos at Horizon 38, at Filton.
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In Exeter, 45,000sq ft Unit A at the Kestral GTX building on Sowton Industrial Estate was let to the NHS, and in Plymouth the , Estover.
In Cornwall, a 11,500sq ft unit wa let on Cooksland Industrial Estate, Bodmin, and there were also a number of lettings at the Aerohub business park in Newquay.