Some 2.4m sq ft of industrial space was sold or let in the South West industrial and logistics market last year with Bristol remaining a key location and showing promising signs for 2012, according to new figures from the Industrial Agents Society (IAS) Western Branch. Other figures from the Office for National Statistics (ONS) show that internet retail sales last year totalled £837m, accounting for 11% of all UK retail sales.
In fact, the take-up for big box logistics floor space intended solely for internet retail trading made of 11% of all Grade A space let or sold, says commercial property specialist Jones Lang LaSalle. "Online retail is expected to continue at a faster pace than overall retail sales and clearly this could have an impact on the demand for traditional distribution floorspace to 'bricks and mortar' stores," said Paul Baker, head of Jones Lang LaSalle's industrial and logistics team in Bristol.
Last year saw Morrisons open the doors of its newly-built regional distribution centre in Bridgwater, with more than 750,000 sq ft of space along with B&Q’s new 800,000 sq ft facility in Swindon. In 2012 the spotlight falls on The Co-operative Group’s 450,000 sq ft regional distribution centre being developed at Avonmouth. Work on the scheme started in the summer of 2011 and is due for completion this spring when it will start to supply more than 400 Co-op stores in Bristol, North Somerset and South Wales.
Paul Baker added: "Demand for big box distribution looks set to continue with talk of the first 1m sq ft requirement for the South West. As well as retail, the growing waste management and recycling industry in this region is becoming another major area of activity. Bristol's 50% recycling rate offers huge potential for growth."
In September last year New Earth Solutions, the Dorset-headquartered waste treatment and renewable energy specialist, opened a waste treatment facility in Avonmouth. Other similar waste treatment and energy facilities will continue to spring up across the region for the likes of Sita, Eon and Cyclomax, driven by commercial and public-sector requirements.
“Elsewhere in the industrial market there are different dynamics in play," said Mr Baker. "While speculative development has all but ground to a halt, demand for second hand industrial space has seen a noticeable increase from manufacturers and distributors.”
Bristol will see its first speculative development for a number of years at Longwell Green where IM Properties have started work on a 50,000 sq ft, eight unit trade park scheme.
“We’ve experienced high levels of interest in this scheme and have already prelet two units to Halfords and Tool Station and are confident that the remaining units being built speculatively will be snapped up.”
