Demand for Grade A Yorkshire industrial property increased dramatically during 2012. Take-up in the county rose to 2.3m sq ft, almost double the previous year’s figure, according to data from Lambert Smith Hampton.
Demand could lead to speculative development
Despite these positive indicators, total take-up in the area fell to 7.4 million sq ft in 2012, which was a drop of 27 per cent over the previous year. It was also the worst showing since 2007.
Only eight per cent of property currently on the market is Grade A. The topnotch properties which are available are largely new build logistics units of over 100,000 sq ft located across South Yorkshire where there is currently an oversupply of this type of property.
According to Robert Whatmuff, the Head of Industrial and Logistics in the North, the lack of available stock is responsible for holding back the market at present. Occupiers of small and medium-sized units are having a difficult time finding space to accommodate future expansion plans.
Whatmuff points out that there is less than one month’s supply of small-to-medium Grade A accommodation in Yorkshire. Occupiers looking for larger sizes will have more selection, since there is a stronger supply of units over 100,000 square feet. He also stated that there is an increase in Design & Build from occupiers with bespoke requirements.
Prime rental values increased in every major centre across Yorkshire in 2012. Whatmuff expects that this trend will continue in 2013, as the market will continue to see a reduction in stock while demand will remain constant.
In some key locations, there are signs that speculative development may return according to industrial and logistics agent Ed Norris.
“Recent take-up of prime space suggests we are fast approaching a new dawn. Whether it be the onset of speculative development or a trend towards high quality refurbishment of existing stock, it is clear there is strong demand for quality product in the right locations,” he said.
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