Industrial Market: update

Eamon Kennedy and Paul Quy of our Industrial & Logistics team take a look at the current market conditions in the region:

Milton Keynes is seeing a continuous rise of start-ups and SME businesses taking up units, most for manufacturing/production, as opposed to straightforward warehousing that was seen post-covid.

Two companies have recently taken units of circa 6,500 sq ft each at Tilstone/Warehouse REIT’s Bradwell Abbey Industrial Estate, and since the start of this year 426,000 sq ft of industrial units* have transacted across the city.

Eamon highlights a significant increase in activity in the mid-box market which is thriving in the region. A combination of pent-up demand and a lack of supply has led to a spate of lettings and acquisitions particularly along the A1M/M1 Corridor.

In just a few weeks, we completed several mid-box deals;

• Acquiring a 55,000 sq ft unit in Milton Keynes for an engineering company,
• Acquiring a 53,000 sq ft unit for a kitchen and bathroom distributor in Leighton Buzzard
• A 39,000 sq ft letting at Stratus Park, Milton Keynes, for a storage distribution company.

Other recent transactions in the market include a food production company taking a 90,000 sq ft new build unit in Dunstable, and two 30,000 sq ft units taken in Bedford. Demand for mid-box units continues to outstrip supply.

There is also evidence that companies are becoming footloose when it comes to a desired location. We are receiving enquiries from companies in East and North London, where, by moving up the M1/ A1 corridors, overheads can be substantially decreased despite securing brand-new units with benefits such as excellent ESG credentials and construction warranties.

This can be seen in PLP’s speculatively built 1.06 million sq ft scheme at South Caldecotte, Milton Keynes, where Huel and Kegstar have taken up 70,000 sq ft and 140,000 sq ft respectively, and a further 1.1 million sq ft is available for future development as part of Phase 2.  

As we look ahead to 2025, the outlook is positive and we are confident that high demand for new and refurbished secondary stock will continue. The increasing pipeline of new developments will attract even more businesses to relocate to the region, where they can find better value for money. The question remains whether supply will catch up with demand.