A leading Bristol industrial property expert believes the West of England could soon see a return to the speculative development of industrial property for the first time in many years.
Russell Crofts, industrial partner at Knight Frank in Bristol, said: “Clearly there is a reduction in supply in the industrial market in the South West and the convergence of market conditions imply a strengthening market.
“The last time we saw similarly constricted supply conditions was in the late 1990s. The market reaction to those conditions then was the start of speculative development. We may see that happening in 2013 – there will be someone willing to speculate sooner or later.
“The recent construction of a new trade counter building by IM Properties at Longwell Green could be the catalyst for the start of speculative construction of more traditional industrial buildings too.”
Crofts believes that when it comes, the return to speculative development will arrive first in the 5,000 – 20,000 sq ft building sector. He said: “This market has not been addressed. Everyone has been chasing the big retailers in recent years but their end of the market will be entirely pre-let.
“Where will it happen first? The answer is, in the very best places. Quality will lead the way. That means constructing the best buildings in the best locations, such as the north of the city.”
He believes Avonmouth and Severnside are unlikely to see these speculative units because of their focus on much larger units.
Russell Crofts said: “At Knight Frank we have been seeing a spate of instructions and deals for industrial premises in this 5,000 to 20,000 sq ft sector. This demonstrates that the green shoots of recovery are well established with many businesses in all sectors seeing growth. This bodes well and shows that, for parts of Britain plc at least, things are going well.”
