Releasing its market overview on the industrial and logistics sector across Aberdeen, Edinburgh and Glasgow in 2020, property advisor CBRE predicted significant growth this year, though development is “urgently” required to meet demand.
David Reid, associate director in CBRE Scotland’s industrial and logistics team, said: “2020 was a remarkable year of resilience for the industrial market in Scotland with a total take-up of 5.45 million square feet.
“2020 take-up was on par with 2019, however interestingly this was achieved over significantly fewer deals (320 deals, down from 566 in 2019). The average transaction size was up from 9,500 sq ft to over 17,000 sq ft, reflecting occupiers’ drive for larger properties in response to supply chain challenges emanating from the Covid pandemic.”
He added: “The year ahead is anticipated to bring occupier focus on building more resilient supply chains, increasing capacity and diversifying suppliers to safeguard against future disruptions.
“With Covid accelerating online demand for retail, we also predict increased demand for last mile logistics properties as retailers seek to move closer to their customers. This strong demand, coupled with a shortage of available land, should result in funding being made available for speculative development.”
In Glasgow – the largest market in Scotland accounting for approximately 65 of all transactions during 2020 – take-up totalled 3.56m sq ft, up 10 per cent on 2019.
Reid said: “In a year of uncertainty surrounding the pandemic, this was a remarkable story, particularly given the lack of quality stock in the market. The speculative development pipeline in Glasgow is fairly limited with only multi-let schemes currently under construction.”
Take-up in the Edinburgh market totalled 1.17m sq ft in 2020, down 21 per cent on 2019. It was mainly dominated by large heritable (freehold) transactions, accounting for 61 per cent of the total figure.
Reid added: “Take-up has reduced every year for the past three years in Edinburgh, reflecting the severe tightening of supply of existing building stock, lack of consented and serviced industrial land and limited speculative development.”