Grey space availability on the up
Grey space – which in property terms means whole or part warehouses for sole use of another occupier that is on the market either via assignment or sub lease – is at an 11-year high according to property analyst CoStar Group.
By Liza Helps Property Editor Logistics Matters
THERE IS 17.7 million ft2 of space available up 56% year-on-year and 143% higher than mid-2022 levels driven by big boxes of 100,000 ft2 plus , whose sublease availability has more than trebled over the past seven quarters to stand at a record high 10.3 million ft2.
CoStar Group Senior Director of Market Analytics Grant Lonsdale said: “This is despite several big sublet/assignment deals in the Midlands in recent months.”
These include Unipart taking the Exertis’ 240,000 ft2 facility in Wellingborough; GSF Car Parts subletting Ceva Logistics’ 450,000 ft2 property in Wolverhampton; and Fast Logistics acquiring Pallet Network’s 163,000 ft2 warehouse in Northampton.
Lonsdale said: “While the elevated amount of tenant space being marketed partly reflects the pandemic ‘race for space’ that resulted in some occupiers taking too much space, it also reflects the likes of Amazon pivoting towards newer, more energy-efficient facilities and consolidation among third-party logistics service providers.”
While tenant space in the smaller size brackets represents a smaller share of availability than big boxes, it has accumulated at a similar pace over the past 12 months.
Lonsdale noted: “Smaller warehouse-using businesses have arguably borne the brunt of recent high inflation and still high interest rates, while contending with sharp increases in warehouse rents and last year’s hike in business rates.
“High operational costs have likely been a factor in recent company insolvencies. One in 175 businesses on the Companies House effective register entered insolvency between May 2023 and April 2024, a rise of 53% on the previous year.
“Despite the brighter economic outlook, many firms remain cautious on committing to costly expansions, while rising sublease availability suggests controlling costs remains firmly on their agenda.”
Larger warehouses available on a sublet or assignment basis include Amazon’s 736,000 ft2 distribution hub in Peterborough and GXO’s warehouses in Ollerton and Sherburn-in-Elmet the former totalling 600,000 ft2 and the later 500,000ft2. GXO, which took over Wincanton in May, is offering the buildings on flexible leases or managed solutions through 2030 and 2037, respectively.
Both Unit 4 Hurricane Way in Sherburn in Elmet and the unit being marketed in Boughton Industrial Estate Ollerton are being marketed by Louch Shacklock & Partners.
