No end in sight for spec space race

Construction / housebuilding

Developers and investors are optimistic about the sector’s short- and long-term prospects.

At the end of 2018, Cushman & Wakefield was tracking 8m sq ft of speculative development across 44 buildings.

“Going into 2019, there is 36% more speculative development under way than the five-year average of 5.9m sq ft, with more schemes likely,” says Bruno Berretta, associate, UK industrial and logistics research and insight, at Cushman & Wakefield.

“Developers’ confidence in the market is partly explained by the low voids. Average void periods fell to nine months in Q4 2018 – the lowest since the start of our records – from a peak of 70 months observed across 16 units in 2014.”

The spec space under construction is predominantly in established locations, although some areas are seeing more activity than in past years, including the M6 north of Birmingham; the north East Midlands; the markets between the M40 and M1; and the South West.

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