Thursday, April 4, 2013

News: High demand for grade A industrial space


Take-up of grade A industrial and logistics space across Yorkshire rose to 2.3m sq ft in 2012, almost double the amount acquired than the previous year, according to the latest research by commercial property experts, Lambert Smith Hampton.

31% of overall take-up was focussed on the high specification, grade A space but despite this, total take-up fell to 7.4m sq ft in 2012, a drop of 27% on the previous year and its lowest level since 2007.

However, only 8% of the stock now available on the market is grade A, which is largely comprised new build logistics units over (100,000 sq ft) across South Yorkshire, where there is currently an oversupply.

Robert Whatmuff, head of Industrial and Logistics in the North at Lambert Smith Hampton, said: "The lack of stock is holding back the market and occupiers of small and medium sized units are struggling to find any suitable space to accommodate their future plans. Occupiers now have very limited options, with no speculative development occurring over the last few years and the flight to prime mentality in terms of recent occupier requirements.

"This has left us with less than one months supply of small to medium grade A accommodation. In the larger size ranges this is less of an issue as there remains a strong supply of Grade A units over 100,000 sq ft, particularly in South Yorkshire. We have witnessed an increase in Design & Build from those occupiers with more bespoke requirements however, for the smaller occupier this is generally not an option that is palatable or deliverable.

"There is already a shortage of choice for occupiers and, due to the lack of speculative development, occupiers will struggle to find suitable properties either in terms of location or specification."

One significant Design & Build development in the region last year was the completion of the new home for Home Décor Innovations. The manufacturer has moved into a 110,000 sq ft state-of-the-art factory at JF Finnegan's Woodhouse Link development on the site of the former Laycast Foundry at Fence in Rotherham.

Despite the 27% fall in take-up, the research showed that every major centre across Yorkshire registered growth in prime rental values, a trend expected to continue. In Rotherham prime rental values increased slightly to £5 per sq ft.

Lambert Smith Hampton website



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