Resilient demand continues squeeze on warehouse supply in Scotland
Article By Iain Davidson, Colliers Director of Industrial & Logistics in Scotland.
The industrial and logistics sector in Scotland has experienced a resilient 12 months. With a total take-up of 5.7 million sq ft, representing, a 9.5% year-on-year decrease, we have witnessed occupiers continuing to face rising operational costs and a shortage of appropriately sized new-build stock to move into.
Small and medium-sized enterprises (SMEs), which constitute 99.3% of all private sector businesses in Scotland and contribute 42.4% of private sector turnover (Scottish Government, March 2023), are the backbone of our economy.
Connect-70
Warehousing demand remains robust across key sectors including food and drink, engineering, services, manufacturing, and logistics. Activity is predominantly concentrated in small to mid-sized units, yet larger deals continue to make headlines including Master Removers Group 54,000 sq ft letting at Belgrave Point, Bellshill; Micheldever Tyres taking 73,000 sq ft at Connect-70, Bellshill; Royal Mail has taken 129,000 sq ft at Gateway House, Livingston; Scottish Power leased 100,000 sq ft across two units at Newhouse and Eurocentral; and James Fisher Defence took 63,000 sq ft at Canmoor’s Westway, Glasgow Airport.
The availability of industrial units across all grades and sizes stood at 9.6 million sq ft in Q4 2024, down 1.6% year-on-year and 13% below the 10-year annual average. This translates to a vacancy rate of 3.4%, a reduction on the long-term average of 4.3%.
For occupiers seeking ready-to-occupy larger units, options remain limited, as elevated build costs and borrowing rates has resulted in developers reassessing their speculative plans, resulting in a thin pipeline which falls short of projected occupier demand. Against this backdrop, rents have continued to rise, with average rents across all grades increasing by 3.3% y/y in 2024 (MSCI) and we anticipate rents will continue to increase throughout 2025.
You can see all of the available commercial property listed by Colliers on NovaLoca here.
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