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Flight to core
14 January 2025
When the economy is challenging but you still have to make a purchase you want it to be the right one and if it is a property, location is paramount and for the logistics sector this only means one thing - securing the best space in the Midlands. Liza Helps reports.

THERE IS a tacit agreement among the research departments of the top property consultancies that give or take a few percentage points almost half the take up of industrial and logistics space so far in 2024 has taken place in the Midlands.
For Tritax development director Joe Skinner: “It’s a flight to prime!” A sentiment widely agreed upon and upheld by the statistics.
Figures from Savills latest Big Shed Briefing show that 48% of UK industrial transactions in units of 100,000 ft2 +occurred in the Midlands, up from the 10-year average figure of 36%. Avison Young research puts the total amount of Big Box grade A take-up at 7.4 million ft2 in the first six months of the year with the East Midlands accounting for 73% of the activity in terms of the amount of floorspace largely due driven by Nike’s 1.3 million ft2 pre-let at Magna Park Corby.
“Take up in the Midlands was 40% higher this year than last year, however it is shy by 6% from the five-year H1 average reflecting the effects of turbulent market conditions of the last 18 months on occupier decision making,” says Avison Young managing partner Andrew Jackson.
For Colliers national head of industrial and logistics Len Rosso it is hardly surprising that the Midlands is taking the lion’s share of national take-up: “The Midlands is the optimum point for logistics.”
This is echoed across the board. Skinner notes: “With two thirds of occupier costs going on transport alone you want to reach as much of the UK as possible within four and a half hours – that puts an occupier in the Midlands where in comparison to a location say in the Southeast an occupier could secure substantial savings on transport costs alone.”
For Cushman & Wakefield’s International partner industrial and logistics David Binks, its all about infrastructure: “The Midlands is the epicentre for big shed development – an awful lot of [warehouse space] is in the middle some 45-50% of the total in broad terms and the reason for that is as well we all know largely due to the proximity to national infrastructure. All the rail freight terminals are based in the Midlands with a new ones coming on line [West Midlands Interchange in Staffordshire and Segro Logistics Park Northampton] there is Hams Hall, Birch Coppice, DIRFT which helps focus activity and distribute to the UK population, its the hub of the motorway network [M1, M6, M40, M5, A14 and not least for the ecommerce era proximity to the largest parcel hubs in the UK with DPD in Wolverhampton, Hinkley and Nuneaton, EVRI in Rugby, DHL in Coventry and Fedex and TNT in Atherstone.”
According to real estate analyst CoStar’s Director of Market Analytics Grant Lonsdale: “All the top deals [in size] bar one have occurred in the Midlands.”
As well as Nike’s 1.3 million ft2 pre-let at GLP’s 3.094 million ft2 Magna Park Corby scheme, there was the 586,00 ft2 letting of the adjacent speculative unit known as MPC3 to Dutch fashion and lifestyle brand logistics company Bleckmann. Yusen Logistics signed a pre-let of 1.2 million ft2 at SEGRO’s 7 million ft2 SEGRO Logistics Park Northampton scheme while the UK’s favourite baker Greggs’ pre-let of around 500,000 ft2 at SEGRO’s SmartParc scheme in Derby.
In 2023, take-up in the East Midlands reached 8.12 million ft2 across 26 transactions, a 33% increase above the long-term annual average. In 2024 to date, occupier activity has rebounded further still, with take-up already reaching 5.02 million ft2 across 11 transactions - 87% up on the long-term H1 average. As inflation has waned and political certainty has increased, there has also been a resurgence in business activity in the West Midlands with take-up totalling 2.99 million ft2 across 11 transactions - 37% above the long-term H1 average.
Prologis UK head of land and development Ian Romano says: “Market conditions do feel more positive and while customers continue to navigate their way through persisting economic and political pressures, there is a cautious optimism that the market will remain steady.”
As the year has progressed requirements seem to be landing with more and more frequency with 3PLs leading the way. According to Savills, 3PLs accounted for 50% of take up in East Midlands, followed by high street retailers at 28%, and wholesalers at 8% while in the West Midlands its been roughly 30% for both manufacturers and 3PLs with 15% from the automotive sector, 12% from online retailers, and 12% from wholesalers.
It is the resurgence of the retailers - in particular omni retailers and ecommerce retailers - that is sparking interest as these are seen as a bellwether for the economy and consumer confidence in general.
Gerald Eve’s industrial and logistics research partner Steve Sharman says: “The Nike pre-let at Magna Park Corby is particularly notable since, post- pandemic, retailer demand has fallen in favour of a focus on cost-saving and efficiency.”
Knight Frank partner James Clements adds: “As the economic outlook has improved demand from retailers has been rising. Over the past four quarters, retailers’ share of take up [for units over 50,000 ft2] has increased to 33% in the Midlands, from 14% in the same period last year.
“This growth is largely boosted by the Nike letting as well as the news that Amazon has committed to a 2.86 million ft2 self build at Northampton Gateway – excluding these deals, take up by retailers still grew 32% year-on-year.”
Colliers Director Industrial & Logistics Simon Norton says: “Fundamentally, the ecommerce side of things is back and driving things strongly, it is almost back to business as usual with average take-up levels [rather than the pandemic panic buying which saw take up levels surge in 2020 , 2021 and 2022].”
Ecommerce requirements have been headline grabbing with Amazon said to be seeking sites for its next generation customer fulfilment centres as well as ready-to-go facilities between 100 – 500,000 ft2 for last mile operations as it upgrades its portfolio in the UK. There have been rumours that the internet giant and 3PL is seeking a substantial plot at real estate investor Oxford Properties Group and developer/asset manager Logistics Capital Partners 8 million ft2 West Midlands Interchange in Staffordshire.
However, Binks reports: “The developer is currently doing site preparation of the first phases of the 736-acre site, and it is rumoured they are talking to occupiers, but no announcements have been made yet.”
The internet giant’s recent foray in the market heralds an important moment for Skinner: “Ecommerce is back in the game – it is well documented that Amazon’s re-emergence is seen as an acid rest for where they see the market.”
Other headline grabbing ecommerce requirements also include Chinese fast fashion behemoth Shein, which is looking for a number of warehouses to support its growth in the Golden Triangle ahead of its much anticipated £50 billion listing on the London Stock Exchange.
There are a number of properties purported to be on the shortlist ranging in sizes between 300,000-400,000 ft2 with viewings across locations including Derby, Daventry, Coventry, and Castle Donington.
Unnamed sources have stated the fast fashion giant is looking for properties that are already fitted out to handle ecommerce operations rather than build-to-suit options. “This may be a godsend,” says Avison Young principal and managing director Rob Rae, “for the likes for JD Sports, ASOS and Boohoo, all of whom have facilities on the market racked out for clothing which just may fit the bill.”
Other ecommerce deals in the Midlands have seen Chinese eCommerce company Furnolic taking the 166,748 DC4 unit at Prologis Park Ryton near Coventry Airport while eCommerce provider Super Smart Service, has snapped up NFU and Ergo joint venture Aver Property’s 354,00 ft2 warehouse at Fradley Park, Lichfield as well as Peel Logistics Property’s 345,039 ft2 speculative warehouse at Stone Business Park in Stafford in the West Midlands.
“All this,” says Savills director of industrial in Birmingham Ranjit Gill, “goes to show that the Golden Triangle is still golden.”
It is certainly the key driver behind decisions by developers such as Logicor to progress with speculative development in the face of challenging economic conditions.
Logicor UK director of project management Anthony McCluskie says: “The Golden Triangle has seen continued growth for some years now, and for good reason – it offers unrivalled access to economies up and down the country and the strategic value that brings to the businesses that keep our economy running isn’t going anywhere. Roughly 90% of the UK’s population are reachable within that all important 4.5hr drive time.
“At Logicor, over half our UK portfolio sits in The Golden Triangle – roughly 17 million ft2. This is currently fully occupied, proving that for the right specification, the demand is absolutely persisting and the flight to the core shouldn’t be overlooked. This is what’s driven our decision to develop in the area – with both our developments at Daventry and Derby expecting to welcome new customers in Q1 2025.”
The investor developer is on site with a 507,503 ft2 logistics/manufacturing warehouse facility known as Derby 507 at Infinity Park Derby. The facility will benefit from 18m eaves, 46 dock and four level access doors, and 25,686 ft2 of two storey Grade A office space, a separate hub office and gatehouse. It will have 55m yards and parking for 77 HGVs and 404 cars and will be available in Q1 2025. Joint letting agents are Avison Young, Cushman & Wakefield and CBRE.
It is also completing the 800,000 ft2 speculative redevelopment of the former Bigfoot warehouse in Daventry. Logicor paid in the region of £85 million for the 38.5 acre site in 2021 and secured planning for the redevelopment of the site in June 2023.
Construction is ongoing on three units of 135,000 ft2, 280,000 ft2 and 385,000 ft2 targeting BREEAM Excellent and EPC A ratings. Practical completion is due at the end of this year with the first building due for occupation in 2025. Joint agents for Logicor Park Daventry are DTRE, JLL and Cushman & Wakefield.
Nearly all the major developers are pushing forward with, or have just completed, some kind of speculative build in the Midlands. GLP has recently completed three units of 119,000 ft2, 138,000 ft2 and 187,000 ft2 at its Magna Park South scheme in Lutterworth and is currently speculatively developing a 761,000 ft2 unit on Magna Park North. The units have been built to net zero carbon on construction and will target BREEAM Excellent as a minimum rating. The developer has recently secured the highest ever BREEAM score for a UK Logistics Facility, with a record post-construction stage mark of 97.8% with its 388,000 ft2 MPS9 warehouse let to electrical factor CEF. Joint letting agents are DTRE and Cushman & Wakefield.
Tritax is looking to reach PC on three units at its 111-acre Symmetry Park Rugby scheme in November on the back of letting four units totalling more than 1 million ft2 to Iron Mountain. The three units of 170,473 ft2, 338,064 ft2 and 390,694 ft2 are being built to net zero carbon in construction targeting a BREEAM Excellent and EPC A + rating. Joint letting agents are Colliers and ILP Partners.
SEGRO has two speculative units at its 3.7 million ft2 SEGRO Park Coventry scheme. One of 140,000 ft2 and the other 220,000 ft2. Both are targeting BREEAM Excellent and EPC A+ rating. Joint agents are DTRE, Savills and Cushman & Wakefield. While Prologis has a 327,689 ft2 speculative rail connected unit at its 7 million ft2 Prologis RFI DIRFT scheme in Daventry and a 261,147 ft2 unit at Hams Hall in the West Midlands.
Despite the increase in take up, the supply of warehousing in the Midlands has been rising in recent months with Savills noting that in the East Midlands supply rose 26% due to the completion of speculative space and the growth in second hand space when compared to the same time last year. A similar tale is told in the West Midlands with supply rising due to speculative completions – currently there are 37 units over 100,000 ft2 totaling 7.37 million ft2.
Clements says: “Availability has been creeping up albeit at a slower pace than at the turn of the year.” According to Knight Frank research the availability of existing buildings in the Midlands increased by 13.4% in the second quarter of the year to 21.9 million ft2 for units over 50,000 ft2 owing to a 22% increase in second hand stock returning to the market, the majority of this Grade B or below.
Much of the space returning in the East Midlands market, was built pre-2000 and according to Savills, recent trends suggest these units may remain unoccupied as occupiers prefer top-tier or custom facilities to enhance supply chain resilience. Analysis of transactional activity by specification shows a clear preference for larger, highly specified units, with 63% of space transacted in H1 2024 being BTS space, 34% being speculatively developed space, and just 3% being second-hand space. Savills requirements index supports the demand for best-in-class quality buildings, particularly those with top ESG credentials.
It’s a similar story in the West Midlands where Savills notes that 84% of space transacted has been Grade A, proving the theory.
That is not to say that second hand space is being left on the shelf. Rosso notes: “Second hand space does get taken up, just not on 15 year leases more likely a flexi lease for two to three years. A lot of second and third tier 3PLs who are more price sensitive will take that space. There is a price point for everything and a building for everyone. Even a GXO will take a cat B building to get themselves out of a hole in the short term while leases are renewed, buildings extended or even being built.”
One would think with all the space available that it was an occupiers’ market – unfortunately, while there maybe space now it is not likely to last especially if occupiers are seeking to upgrade their space.
Avison Young principal and managing director Rob Rae says: “While there has been a lot of space available, there is not many under construction so this time next year there will be a lot more limited supply.”
According to Colliers head of industrial research Andrea Ferranti: “The delivery of speculative space in the Midlands has halved and there looks to be even less going forward into 2025 with only 3.46 million ft2 of speculative space in 12 units under construction or due to start.”
In particular, it is the larger buildings where a dearth is expected to be found. Both GLP senior development director Joe Garwood and GLP development director James Atkinson say demand is growing for ever bigger and taller buildings. Garwood says: “Looking at the sizes and ages of the Magna Parks you can see the transition to larger and larger buildings. The average size of a building at Magna Park Lutterworth [the original Magna Park started in the 2000s] has not broken 300,000 ft2, while at Milton Keynes [2010s] the average size is 450,000 ft2 while at Magna Park Corby [2023] there is nothing under 500,000 ft2.”
Atkinson notes: “At Magna Park Central in Lutterworth the average size building is 167,000 ft2 but this has increased as we have done the extensions Magna Park North and South – predominantly the buildings in the parks have got bigger as occupiers demand bigger and taller.”
Both are quietly confident that the 761,000 ft2 speculative warehouse that they have currently under construction will not be around for long. There are currently just four buildings over 500,000 ft in the Midlands with GLP controlling two: the speculative mega shed at Magna Park North and the returned 660,000 ft2 MPC2 unit in Corby that the developer got back from struggling tenant modular housebuilder TopHat recently.
Nationwide there are only a further four or five or so modern Grade A units over 500,000 ft immediately available or under construction.
While a lot of the demand for these buildings is ecommerce driven a lot of occupiers says Norton ‘are looking to evolve their supply chain. Yusen’s 1.2 million ft2 facility at Northampton gateway is a result of them ultimately folding a number of facilities into one to give them scale and rail’.
With demand for these mega sheds coming from a range of occupiers including manufacturers it is unsurprising then that developers and investors are keen to secure land that can accommodate units of 500,000 ft2 plus. Developer Panattoni is thought to have paid more than £1.2 million an acre for a 47-acre site where it plans to build a three-unit £135 million net zero carbon logistics scheme to be known as Panattoni Park Coventry. The 600,000 ft2 development will consist of a 540,000 ft2 warehouse and two smaller properties of 40,000 and 20,000 ft2.
Panattoni head of development East and West Midlands Gregg Titley, said: “There is a lack of supply of large logistics units of 500,000 ft2 plus in the region, while demand remains strong.”
SEGRO head of national markets Dan Holford says: “There are limited sites that can accommodate facilities at this scale and the enabling infrastructure, and we anticipate strong demand and competition in this part of the market over the coming years.”
Both SEGRO Park Coventry and SEGRO Logistics Park Northampton can deliver these mega sheds.
Romano says: “Our strategy is to have land available to meet our customers’ immediate requirements and a pipeline of land for their future growth. To meet both immediate and long-term customer needs we have land capable of delivering single units up to 1.6m ft2 in the Midlands. Typically, when a customer is looking into a bespoke, build-to-suit opportunity, the enquiries range in sizes – anywhere up to and over one million ft2.”
“With the focus on scale,” says Fisher German director Laura Sutton, “it is no wonder there has been a re-emergence of the East Midlands as a distribution location as opposed to manufacturing - it has the land at a price that is at a discount to the West Midlands where prices did get a bit steamy.”
She notes that there are several schemes in planning that can accommodate more than 1 million ft2 with both DHL and CEVA acquiring land direct in order to self-build. “Indurent, IM Properties, Newlands development have all got control of parcels of land that can deliver sizeable schemes with one upwards of 2 million ft2.”
Recently developer and investors Peveril Securities and Sladen Estates submitted proposals for the second phase of their Summit Park Mansfield in Nottingham that will include a warehouses of 525,000 ft2 and a smaller unit of 172,000 ft2.
And it is thought there will be fierce bidding on a site in Enderby Leicestershire which has just secured planning on appeal for a 1.15 million ft2 scheme that could accommodate a single unit of 500,000 ft2.
Another site thought to have dozens of bids is the 54-acre former Coca Cola plant on the Brackmills Industrial Estate in Northampton which is being marketed by BNP Paribas. At present the site accommodates a 320,000 ft2 warehouse built in 1995. It is thought that the site presents an opportunity to develop a prime logistics park of some 1.2 million ft2.
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