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Gloucestershire Business News

Industrial and logistics sector the powerhouse of commercial property market, says Alder King

The industrial and logistics sector was the driving force behind the region's commercial property market last year, recording annual take-up of more than 6.3 million sq ft, up from 4.2 million sq ft in 2019.

This is the sector's highest figure since 2016, says Gloucester-based property consultancy Alder King in its newly published report Market Monitor.

Alder King said that the sector's performance was driven by continuing demand for e-commerce, government investment in infrastructure and businesses safeguarding against Brexit through the repatriation of manufacturing and stockpiling of goods.

The logistics sector, particularly internet fulfilment, and manufacturers/added value engineering occupiers also contributed to the demand.

Simon Price, Alder King's senior partner, said: "After a year that threw up a host of questions for the property market - about how we live, how we work, how we shop, how we socialise - it's remarkable how resilient some sectors of the market were in 2020.

"And although as we begin 2021 the situation still remains unsettled, there are a number of positive market opportunities for developers, landlords, investors and occupiers, making us feel optimistic of further activity later in the year."

The report suggests that strength of the industrial/logistics sector is best illustrated by Greater Bristol which registered 2.2 million sq ft of industrial take-up, however Gloucester also registered an impressive take-up of 550,000 sq ft. 

The majority of Gloucester's supply in recent years has come from new build development and this remains the case. Highlights include St. Modwen's first phase at St. Modwen Park Gloucester which reached practical completion at the end of 2019, with the 45,000 sq ft building let simultaneous with completion to Adey Innovation. The 56,000 sq ft building let to ProCook in June and the 74,000 sq ft building was let to Swantex Paper in October.

Looking into 2021, Peveril Securities are scheduled to commence work at Centre Severn, Barnwood on a new 125,000 sq ft distribution facility on a 16-acre site which is being procured on a pre-let basis. And in Tewkesbury, Moog have agreed terms for a new 184,000 sq ft unit with expansion land, again on a pre-let basis.

The report adds that supply stands at approximately 350,000 sq ft and that available stock will be boosted by much needed new speculative development starts.

While the office sector was clearly hit by the pandemic, the region still recorded a positive 1.4 million sq ft of take-up, boosted by a very strong Q1 and an encouraging Q4 which saw the completion of several deals which had been negotiated in late summer following the end of the first lockdown. Gloucester's office market remained approximately in like with the five year norm at 140,000 sq ft.

Simon Price added: "After a year like no other, we start 2021 with a Brexit trade deal in place and a Covid vaccination programme underway and are optimistic of a sustained bounce-back in most sectors of the market from the second quarter of the year."

For more detailed analysis, including supply, take-up and rental data across 10 key centres, access/download Alder King's Market Monitor 2021.

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