New analysis from the firm suggests there is demand for industrial space from companies across a range of sectors, partly as a result of changes brought about by COVID-19. 

Colliers expects average rents to grow at a moderate pace this year on the back of tight availability and robust occupier activity.

Looking at leasing activity in recent months, Colliers said that, for obvious reasons, the healthcare and medical sectors were active last year, with large amounts of supplies having to be easily accessible to be moved around the country quickly. 

And with lockdowns and various restrictions introduced since March last year leading to a rapid rise in online shopping, the storage, distribution and parcel delivery sectors were all looking to lease more space. Other sectors such as food and drink, engineering and manufacturing were also driving demand for industrial accommodation.

Iain Davidson

Iain Davidson, director of industrial and logistics at Colliers in Glasgow, said: “Coronavirus has had a devastating impact on many parts of the economy, but it has also driven up demand for industrial space across Scotland, which was already strong before the pandemic. I see leasing activity continuing to increase this year, as companies look to build more resilience into their supply chains.”

Leasing activity in Scotland for all sizes reached 6.4m sq ft in 2020, which reflected an increase of 7% on 2019’s activity. According to CoStar, total availability for all sizes is at 11m sq ft across Scotland. This equates to an availability rate of 4.7%.

“Businesses are adopting more localised strategies, while increasing capacity and efficiency,” Iain Davidson added. “There is therefore an urgent need for speculative development in Scotland if this demand is to be met.

“The development market now appears to be responding to robust occupational demand, but it will be at least 2022 before most proposed schemes come on stream. Even then, in our opinion, the pipeline being suggested will be insufficient to meet current and projected demand.”

In the East of Scotland, the speculative development segment of the market has taken a slightly different path than the West.

Lewis Pentland, associate director of industrial and logistics at Colliers in Edinburgh, added: “While there has been some speculative development activity in the East, this has been limited to smaller multi-let estates. We are now witnessing a shortage from 20,000 sq ft upwards. As a result, we are seeing rental growth in existing stock, with design and builds likely to feature more prominently over the coming months.”

NHS has led the way in recent deal activity, taking two buildings from clients of Colliers at Eurocentral, totalling 290,000 sq ft. Not surprisingly, Amazon has also been active, including the pre-let of a 144,000 square feet build-to-suit distribution hub at Glasgow Business Park. 

Earlier, Colliers sold 4 Huly Hill Road, Newbridge, a 32,000 sq ft unit, to Kent Foods. Some other transactions include: JW Filshill’s 120,000 sq ft pre-let at Westway Park, Renfrew; SB Components and LumiraDx leasing 55,000 sq ft and 42,000 sq ft respectively at Eurocentral; and the sale of a modern 32,000 sq ft unit at Oakbank Business Park in Livingston, all brokered by Colliers.