Research article

The logistics and industrial market in the West Midlands


Whilst Brexit is meaning deals are generally taking longer to complete we believe there is pent up demand for good quality space, which is being supported by the rents that have been achieved this year

Prologis Park, Birmingham Interchange

Prologis Park Birmingham Interchange

Table 3

TABLE 3 | Key stats
Source: Savills Research


  • The supply of existing units over 100,000 sq ft in the region currently stands at 5.1m sq ft, the highest level for at least four years. However, almost 700,000 sq ft is accounted for in one unit, the former Toys R Us building in Coventry, which has seen considerable competitive bidding recently.
  • Removing this unit brings supply to 4.4m sq ft, broadly in line with the upward trend we have witnessed in recent quarters.
  • As with the East Midlands developers reacting to prevailing market conditions have changed the balance of supply both in terms of quality and size. For example 62% of current supply is classified as grade A, compared to just 30% at the start of 2015 and 54% of current supply for units over 200,000 sq ft, compared to the same time two years ago when there were no units on the market over 200,000 sq ft.
Figure 9

FIGURE 9 | Supply by size
Source: Savills Research


  • Take-up in the area has however been subdued in first half of the year with just 1.38m sq ft transacted, across eight separate deals.
  • In the most part this fall can be attributed to the reduction in demand from the automotive and manufacturing sectors. This sector has, over the last five years, averaged 2.2m sq ft of take-up per year, compared to just 800,000 sq ft so far in 2018.
  • Given the current state of the negotiations for the UK to leave the European Union it may not be until 2019 that we see demand from these sectors increase once the terms of our future relationship with the EU is known.
  • It should however be noted that good demand has been maintained for speculatively constructed units. Three speculatively constructed units have been let this year, all in Coventry, with an average void period of six months.
  • Away from East Midlands Gateway Prologis achieved success as their speculatively developed unit DC 115 at DIRFT was let to Panic Transport, giving a void from PC of just seven months.
Figure 10

FIGURE 10 | Take-up by occupier type
Source: Savills Research

Development pipeline

  • Savills is currently tracking 1.7m sq ft under construction in the area across nine schemes with an average unit size of 191,000 sq ft.
  • The largest unit is Wolverhampton 450 where First Panattoni are delivering 448,000 sq ft, the largest unit developed speculatively in the West Midlands in this cycle.
Figure 11

FIGURE 11 | Development pipeline by date
Source: Savills Research