Yorkshire is experiencing a transformative wave of industrial regeneration, building on the accelerated take up of quality space through the pandemic with the overnight shake up and explosion in ecommerce. In addition, wider global macroeconomic drivers have pushed for supply chain onshoring, we have seen a resurgence of UK manufacturing, as well as burgeoning interest in energy infrastructure, all of which is complimented by a robust, skilled labour supply within the region.

Last year, take-up activity for units exceeding 100,000 sq ft in Yorkshire reached 1.8 million sq ft across 11 deals. Although this was an 11% year-on-year decrease in take-up of space, it is unsurprising to see some occupier slowdown following the peak demand in the region during the Covid pandemic, the wider geo-political environment uncertainty and ultimately the increasing costs of doing business.

As a result, supply of warehouse space has remained elevated over the past two years, peaking at 6.9 million sq ft in December 2024, with 4.2 million sq ft of that Grade A quality. The increase stems from 5.4 million sq ft of speculative unit deliveries during the last two years, in response to a critical shortage within the region which at one point had no Grade A supply at all, along with some secondary and tertiary space returning to the market. The majority of the supply is concentrated in South Yorkshire (5.29 million sq ft). However, we have seen this provision of additional supply slow down substantially as currently there’s only one unit, Panattoni’s Central A1(M) of 769,000 sq ft, due for delivery this year.

It is worth noting that the regional 5-year average annual take up for units over 100,000 sq ft stands at 4.2m sq ft, so the reality is current supply of Grade A accommodation is well below the 12 months average take up. This year has already started positively, with take up to date at 837,000 sq ft and a further 611,000 sq ft under offer, already reducing Grade A supply by 1.4m.

However, despite the short-term jump in vacancy levels, average rents have continued to increase by 5.2% year-on-year in 2024, with core submarkets now surpassing £8.25 per sq ft in areas with tight availability, as occupiers with requirements that must be satisfied in the near-term compete for space that is still in relative short supply.

Occupiers continue to prioritise ESG-compliant units, as they enhance operational efficiencies as well as ensuring companies wider environmental and social responsibilities. This trend is evident in several recent deals which saw speculatively developed warehouses go under offer from a broad range of occupiers such Batt Cables committing to 259,286 sq ft at IPort Doncaster, Moran Logistics also committing at IPort to 166,872 sq ft, and Sika Everbuild taking 280,663 sq ft from Firethorn at Sherburn 42, all schemes that Colliers are marketing.

Regeneration of industrial

The resurgence of manufacturing has contributed to a wave of occupiers choosing to make the region their home. With the excellent highly skilled labour supply, we’ve seen tool manufacturer Dormole Limited pre-let 137,000 sq ft at Bessemer Park in Sheffield, Sheffield Forgemasters’ confirming their commitment to new facility near Meadowhall, and BAE leasing of 96,805 sq ft also at Bessemer Park, through the Colliers team, for its new artillery manufacturing plant which will come online this year.

There’s also a new wave of industrial and business parks being created around Yorkshire Energy Park, as part of Humber Freeport alongside the excellent opportunities at Goole Freeport. The recent announcement of the re-opening of Doncaster Airport, initially for freight transport and the significant neighbouring industrial, logistics and advanced manufacturing development opportunities at both the airport itself and iPort Doncaster with its dedicated, expanding rail freight terminal, will only add further to the credentials of the region as one of the UK’s logistics hotspots for overseas imports as well.

Yorkshire’s industrial market is at a pivotal point, with significant potential for growth and regeneration. By leveraging the region’s strengths in ESG-compliant space, energy infrastructure, and a strong labour supply, Yorkshire can continue to attract investment and drive industrial growth. As the market evolves, stakeholders must navigate the challenges and seize the opportunities to ensure a prosperous future for the region.