Developers have recognised the gap in the commercial property market for speculative building, and the gamble is paying off, according to Harris Lamb.
Prologis and IM have responded to a growing demand from businesses for new commercial space, both investing in large speculative build projects, confident in the knowledge that once completed, tenants will snap up the leases.
Charles D’auncey, director of Harris Lamb, said: “After years of treading water, the final quarter of last year saw a wave of activity from companies who now have the confidence in both the property market and economy in general to invest in brand new, larger premises. They can now justify the expense and long term investment in the move to bigger premises – the problem being that those premises weren’t there for the taking, and design and build options were too long term in the lead-in period.
“Developers have now stepped in to fill that niche, with IM speculatively building two 150,000 sq ft industrial units, both of which has already been let to Dräxlmaier and Bunzl. Further to that success, the developer is going on to develop a second 150,000 sq ft unit at Birch Coppice at Tamworth.
“In addition, Prologis is speculatively developing a 225,000sq ft unit in Ryton, Coventry – there’s no doubt that with confidence returning to the market, that will be let very quickly, and there’s now a need for developers specialising in small to medium units to follow suit.”
Charles added that the manufacturing and industrial sector is flourishing once more – the MAS Barometer last month revealed that almost 90 percent of medium-sized manufacturers in the West Midlands are planning major investment.
“With a third of the firms surveyed as part of the Barometer planning to improve premises, developers can follow IM and Prologis’ lead safe in the knowledge that businesses are seeking sites for growth and that they are fulfilling that requirement,” added Charles.
