Member Article

West Yorkshire industrial property market soaring - Knight Frank

The total take-up of industrial units over 50,000 sq ft across West Yorkshire reached 1.7m sq ft in the second half of 2015, according to global property consultancy Knight Frank’s new industrial property LOGIC report.

This shows a 58 per cent increase on the first six months of 2015 and was 16 per cent higher than the same period in 2014.

Among the main deals, TK Maxx signed a lease for 635,000 sq ft at Cross Point in Wakefield and BSS acquired 50,000 sq ft at Trident Park, Normanton.

Design and Build accounted for two-fifths of take-up in this period, while take-up of second-hand space more than doubled to just over one million sq ft. Design and Build has been mostly focussed on prime regional sites in Aire Valley, Leeds and Trident Park, Normanton.

Tom Lamb, industrial property specialist with Knight Frank in West Yorkshire, explained that availability of units over 50,000 sq ft stood at 3.1m sq ft at the end of 2015, 49 per cent up on the first six months of the year and more than double the level of availability at the same time in the previous year.

Mr Lamb said: “Of the 21 units available, only four were new grade in prime locations, the others had been available for over two years and less suited to modern industrial occupier requirements.

“Developers are struggling to acquire sites with planning permission and flat land to accommodate footprints over 500,000 sq ft, while there are currently no units over 50,000 sq ft being speculatively developed in West, East and North Yorkshire.

“On the investment side, industrials show a good return compared with other assets. Given the low supply and low costs of holding industrial vacant units, investors are still confident in this sector, which remains high on their list of requirements.

“Investor appetite ranges across the board from large single-let distribution units to small estates occupied by local businesses. The growth in internet retailing has driven demand from both occupiers and investors and Last Mile Delivery is of particular interest,” said Mr Lamb.

He added: “Occupier demand across the region has remained steady, with the majority of requirements being driven by the e-fulfilment and manufacturing sectors. Whilst there has been a distinct lack of third party logistics enquiries this is likely to change as spare capacity in the supply chain reduces.

“The mid-sized warehouse market is particularly buoyant due to banks pro-actively funding growing Yorkshire businesses and we anticipate the greatest rental growth potential in the 10,000 to 50,000 sq ft size range.”

The prime headline rents in Leeds are £6 per sq ft for units under 20,00 sq ft; £5.75 (up to 50,000 sq ft); and £5.50 (over 50,000 sq ft).

Knight Frank was involved in a number of significant logistics and industrial property deals during the second half of 2016, including the multi-million sale of Sterling Capitol’s 11.5 acre Carcraft site at Capitol Park in Tingley, south Leeds, to AvailableCar.

This was posted in Bdaily's Members' News section by Robert Beaumont .