West Midlands mid-box industrial market gains momentum, Savills report reveals

The report notes that, historically, much of the stock in the 30,000 to 100,000 sq ft size range in Birmingham has been aging, with many units exceeding 30 years old. However, a recent surge in development is helping to address the supply gap, providing much needed new stock to meet growing demand.

Since the end of 2022, enquiries for units below 100,000 sq ft have increased by around 30% in the West Midlands, the report reveals, demonstrating the strength of occupier demand in this segment with continued interest from businesses requiring high-quality manufacturing, logistics, and distribution spaces.

This demand is being driven by a combination of factors, including e-commerce growth, supply chain restructuring, and the need for more energy-efficient, ESG-compliant facilities, says the report.

It reveals that, despite strong demand, available supply in the sub-100,000 sq ft segment has declined by 41% since 2009. Currently, there is only 5.89 million sq ft of available space within the 20,000 - 50,000 sq ft range and 5.78 million sq ft in the 50,000 - 100,000 sq ft range across the West Midlands.

Given that take-up in this bracket reached approximately 3.3 million sq ft last year, the challenge remains to maintain a steady pipeline of new, high quality developments, the report observes.

It states: “Low vacancy rates further highlight the tight market conditions. Void rates currently stand at 5.4% for 20,000 - 50,000 sq ft units and 6.9% for 50,000 - 100,000 sq ft units, both below the regional average vacancy rate of 7.5%. With supply constrained, new high specification developments are playing an important role in supporting the continued growth of the market.”

Smith’s report notes that helping to combat this shortage in supply are many new schemes that have recently reached practical completion, bringing fresh stock to the market, addressin the shortfall but also raising the bar for industrial space in the region.

In addition, superior sustainability credentials such as BREEAM Outstanding ratings, EPC A energy efficiency standards, solar PV installations, EV charging stations, and enhanced sustainability measures are becoming increasingly common, the report reveals, which it says reflects the shift towards ESG-conscious industrial real estate.

One example cited by the report is the Urban8 scheme in South West Birmingham, developed by Canmoor, which offers high-tech urban logistics and manufacturing space across eight units ranging from 26,000 sq ft to 70,000 sq ft.

“Developments like this are setting a new standard for the mid-box market, providing occupiers with modern, sustainable spaces that align with evolving business needs,” the report adds. 

Looking ahead the report predicts that, with supply remaining constrained and demand continuing to grow, the mid-box market in Birmingham and the wider West Midlands is likely to remain competitive throughout the year.

Headline rents are projected to exceed £12 per square foot in 2025, which the report says reflects both the market’s strength and the increasing quality of new stock being delivered.

“As the industrial sector continues to evolve, maintaining a steady flow of new developments will be critical to meeting occupier demand and sustaining the region’s economic growth.

“The mid-box market is playing a pivotal role in shaping Birmingham’s future, offering businesses the modern, efficient, and well-located spaces they need to thrive,” the report concludes.