Member Article

Last years industrial take-up rose 69% with this year set to exceed

New research released by JLL predicts that improving economic conditions will translate into increasing industrial property demand this year, with take-up set to exceed 2013 levels.

JLL predicts a return to rental growth over the next four years and strong investor activity in the UK market.

Yorkshire and Humberside, say the property agents, saw industrial take-up rise by 69% compared to 2012 with the region facing an acute shortage of good quality stock.

A number of factors have contributed to this improved picture in Yorkshire, according to the firm, rising confidence in the economic recovery, but also including evidence of re-shoring in the manufacturing sector, overflow demand from the Midlands and North West together with the changing nature of distribution.

According to JLL, Markham Vale, a 200 acre prime business and distribution park located between Sheffield and Nottingham has capitalised on the current conditions with three design and build units under construction.

Richard Harris, director in industrial and logistics at JLL in Leeds, said: “Demand has been an improving picture since Q4 2013 and continues to be robust throughout Yorkshire for units under 100,000 sq ft.

“Negotiations are moving in the landlord’s favour with incentive packages beginning to harden and headline rents starting to see upwards movement, particularly where product is modern.

“The region is facing an acute shortage of good quality stock and even though we are seeing selective instances of speculative development, it will not satisfy demand. Build to suit will become more prevalent over the next 12-24 months.”

JLL says that the big shed market (units over 100,000 sq ft) remains active, although demand is largely retail-led and focused on key sites or buildings mostly in established locations around Wakefield or Doncaster.

The manufacturing sector is starting to generate more demand, although this mostly remains sub 100,000 sq ft.

JLL expects to see an increase in speculative development nationally, with a number of ‘big box’ units and smaller multi-let schemes underway across the UK.

There is currently some 2.1 million sq ft of floorspace speculatively under construction, including ‘big box’ units and smaller multi-let units which will help to boost dwindling levels of Grade A stock.

In Yorkshire, JLL says a strengthening market creates opportunities for speculative development particularly as there is now no Grade A stock available in Leeds.

This was posted in Bdaily's Members' News section by Clare Burnett .