Occupiers are returning to traditional distribution locations such as the Midlands, according to BNP Paribas Real Estate.

Its research shows that last year the Midlands outperformed all other regions, accounting for 25 per cent of take-up across the industrial and distribution sector compared with other previously popular hotspots including the north west and Yorkshire and the Humber which accounted for 11 per cent and nine per cent respectively.

Tim Suffield, head of the Birmingham office and national head of industrial agency, said: “The take-up figures suggest that the market is reverting back to core logistics regions such as the Midlands, where a broader range of units are available.

“This is being driven by the fact that occupiers do not want to speculate at cheaper locations whilst better located property is available at competitive rates. Increased road transport costs also continue to be a key driver.” Occupiers are also demonstrating a preference for smaller units with 53 per cent of deals taking place in the last year in the 50,000-100,000 sq ft category and the Midlands is better placed than other locations to meet this need having a broad supply of units in this category, according to the research.

Mr Suffield added: “Whilst take-up for the next year will fall, this may not be as drastic as predicted by some. This is due to food and non-food retailers consolidating their supply chains leading to higher levels of activity in the sector; the possibility of some large pre-let deals returning to the market; the continued growth of budget retailers, internet delivery and service centres and the expanding presence of waste and recycling occupiers.”