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The Business Magazine November 2023
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Race to ESG and shortage of supply underpin Q3 industrial and logistics demand – Avison Young

14 November 2022
The Business Magazine article image for: Race to ESG and shortage of supply underpin Q3 industrial and logistics demand – Avison Young
Matrix49, Avonmouth, Bristol

The industrial sector’s resilience and strong market fundamentals have held firm despite the uncertain outlook for commercial real estate and the wider economy, according to the latest data by commercial property agent Avison Young.

“Although national take-up levels year to date have fallen short of 2021’s total (40.28 million sq ft), this has been driven not by the current economic climate but by a chronically undersupplied market," said James Short, Avison Young, Bristol.

"Availability of grade A space across the UK stands at 24 million sq ft, equating to only two months’ worth of supply based on demand of the last three years.

“Nevertheless, demand should remain strong, particularly for ‘best-in-class’ buildings with strong ESG/BREEAM credentials. Landlords will look to capitalise on this demand by deploying additional grade A stock and further retrofitting existing stock as they progress towards the government’s MEES targets by 2030.”

Take-up across the South West region during Q3 came to 514,465 sq ft, compared to a five year Q3 average of 256,175 sq ft.

In Bristol, 36 deals were transacted in the third quarter of this year, mainly consisting of multi-let properties and a handful of smaller mid-boxes, with only three deals over 50,000 sq ft.

The shrinking availability of standing stock is continuing to hinder take-up in Bristol, causing a wall of occupiers who can’t find what they want and need.

However, with a number of new spec warehouse buildings in the region now being built out, there is more positivity in the air for occupiers.

“Developers are now factoring environmental and social value-add into their new build schemes to ensure they have a best-in-class, future-proofed product, such as at Horizon38 in Filton and Matrix49 in Avonmouth,” said James.

Unit G5, the 115,000 sq ft warehouse at Horizon38 from MSF Filton is now taking shape, ready for occupation April next year. Whilst Equation Properties have just started on site with Matrix49 at Avonmouth (pictured), speculatively building out 130,000, 170,000 and 235,000 sq ft units.

Peter Davison is deputy editor of The Business Magazine. He has spent his life in journalism – doing work experience in newsrooms in and around Bristol while still at school, and landing his first job on a local newspaper aged 19. By 28 he was the youngest newspaper editor in the country.

An early advocate of online news, he spent the first years of the 2000s telling his bosses that the internet posed both the biggest opportunity and greatest threat to the newspaper industry and the art of journalism. He was right on both counts.

Since 2006 he has enjoyed a career as a freelance journalist. He lives in rural Wiltshire with one wife, two children, and three cats.

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