Flurry of 100,000-Square-Foot Burton Lettings Boosted Volumes
Shropshire and Staffordshire is leading leasing activity in 2023 among the 54 industrial markets CoStar tracks across the UK with 1.2 million square feet of deals. Most of the activity has been in Staffordshire, which has seen several 100,000-square-foot lettings alongside robust mid-box and multi-let activity.
With no mega-box deals (larger than 250,000 square feet) to boost the numbers, online retailer Bathroom Mountain signed the largest letting, a 175,000-square-foot five-floor warehouse on Canal Lane in Tunstall, Stoke-on-Trent, doubling the size of its existing premises.
There was a concentration of activity along the A38 corridor near Burton upon Trent where three 100,000-square-feet lettings were agreed, all to logistics companies – Kammac, Mini Clipper and LIT Logistics Solutions. Kammac, which has ranked in the Sunday Times’ 100 fastest growing businesses for the last two years, has taken around 2 million square foot in 10 lettings since 2019, predominantly in the North West.
Staffordshire has benefited from stronger leasing in the mid-box sector than other markets and particularly lettings of new-build units, which have included 77,000 square foot at Ergo 77 on Shackleton Way in Stafford and two units north of Wolverhampton, the 68,000-square-foot Apex 54 and 48,000 square feet at Wolf Pack on Hilton Cross Business Park.
London ranks second for leasing activity this year, although with much more stock, leasing only accounted for 0.5% of its inventory, compared with Shropshire and Staffordshire’s 0.9%. This was a similar proportion to Northampton, Coventry and Cheshire, which also placed high on the list, albeit with leasing supported by demand for larger units.
Among the largest lettings so far this year was third-party logistics firm Syncreon’s prelet of 598,000 square feet at Segro Park Coventry at a rent of around £8.50 per square foot. This came ahead of two standout lettings in Cheshire and Northampton agreed in January: PLP’s leasing of 460,000 square foot warehouse to retailer TK Maxx in Crewe and DSV’s 387,500-square-foot letting at Brackmills Gateway in Northampton, also at £8.50 per square foot.
These lettings represent some of the largest deals in a relatively slow start to the year – first quarter total take-up across the country amounted to around 12 million square feet, the lowest quarterly figure since the pandemic began. Weaker business conditions have led to some tenants postponing growth plans, moving to cheaper accommodation, or seeking cost reductions through subletting surplus space. However, the sector is expected to continue to benefit from structural tailwinds, which should support leasing activity, keep vacancies low and rents moving upwards.