Supply of available industrial space in Yorkshire and North East remains critically low, reports Savills

Savills reports that the majority of space that is available in the Yorkshire and North East region is low- quality, second-hand space, with only 22% of supply classified as Grade A. Research from the real estate advisor shows that, in the last three years, 85% of industrial take-up in the region has been for Grade A space, meaning that the larger proportion of Grade B and C stock could become obsolete through not being able to accommodate modern occupier requirements.  

Tom Asher, industrial and logistics director at Savills Leeds, comments: “The chronically low levels of good quality stock has led many occupiers down the build-to-suit route to acquire space, with build-to-suit accounting for 70% of space transacted in 2022 in the region. Major developments, such as Konect 62 in Knottingley, West Yorkshire, where 1.1 million sq ft of warehouse space is currently under construction, remain key to providing occupiers with opportunities for quality manufacturing and distribution space. Otherwise we risk seeing requirements being satisfied elsewhere in other parts of the UK.”

Savills reports that take-up for Yorkshire and the North East reached 10.52 million sq ft in 2022, surpassing the long term annual average by a significant 88% in spite of the macroeconomic headwinds experienced in the second half of the year. Manufacturers were the most active occupier type, followed by online retailers, high street retailers and third party logistics firms, highlighting the breadth of businesses looking for space in the region. 

Almost a third of all take-up (30%) took place within the North East as the region continues to grow as a location of choice for manufacturing l and logistics occupiers.

Richard Scott, industrial and logistics director at Savills Newcastle, adds:  “The lack of supply across the North East has led to speculative schemes being delivered with occupiers prioritising the best quality space alongside market leading ESG credentials. This increased developer activity on sites such as Forrest Park in County Durham, which has recently gained planning consent for 1.7 million sq ft of space, is much needed to help address the chronic lack of supply.”