Shortage of Small Industrial Units as Demand Peaks
11th August 2014
A report on the state of industrial property in South Yorkshire has indicated that levels of take-up in the first half of 2014 are almost double those of the same period last year, forcing a shortage of supply.
The LOGIC report, by Knight Frank, shows that initiatives provided by Enterprise Zones - supported by awarded grants and hardening of occupier incentives on sub 25,000 sq ft units over the course of H1, are supporting speculative development. And as manufacturer enquiry levels increase through an improving economy and strengthened manufacturing output across South Yorkshire, industrial property stock levels have decreased, creating a renewed demand for smaller industrial units. Rebecca Schofield, partner at the Sheffield office of Knight Frank, said: -The demand for industrial stock across South Yorkshire is a strong economic indicator for the region and incentives at the smaller end of the market are paving the way for a new round of speculative developments, as the levels of stock reach a historic low since recessionary pressures abated. -Improving economic fundamentals are starting to facilitate speculative development already and two units at 22,000 and 30,000 sq ft are now under construction at the Advanced Manufacturing Park, which have been supported by Rotherham Metropolitan Borough Council. These are likely to be taken-up rapidly as occupier interest in this scheme remains strong. -In addition, the announcement that Factory 2050 is moving to Sheffield Business Park is likely to attract additional manufacturing occupiers to the region and the business park itself is considering speculative developments in its next phase. The report indicates a number of small to medium sized schemes which are expected to be delivered to the market in the second half of 2014 following the award of ERDF grants. Rebecca added: -We anticipate speculative developments on site at Vantage Park, Sheffield of around 64,000 sq ft in 10 units. -Similarly, 13 units are being speculatively built at Bullrush Grove, First Point in Doncaster, ranging from 2,000 to 12,500 sq ft arranged in terraced, detached, and semi-detached formats. And in terms of future supply, the report points to a number of business parks along the M1 / M18 corridor, where planning consent is in place which are now ready for development, including G Park Doncaster, Smithywood and Sheffield Business Park. Rebcca added: -As a result of strengthening demand and falling supply, the market is starting to move into landlord's favour. Occupier incentives on smaller units of sub 25,000 sq ft, hardened further over the course of H1 and we are seeing occupiers starting to seriously consider build to suit options. For further information contact Rebecca Schofield at Knight Frank on 0114 272 9750.