The Yorkshire office of national property consultancy Lambert Smith Hampton (LSH) has reported increased take up in Grade A space in its Q1 Industrial Market Review. These results indicate that the region is now facing a shortage in speculative development that could impact on requirements in the region for 2014.
The first quarter has seen strong investment volumes for industrial property in Yorkshire, with the region accounting for 22 per cent of total transactions, which amounted to £102million in Q1, twice the 2013 figure.
Occupier demand is at its highest in Leeds, with prime headline rents valued at £6.25, followed closely by Sheffield at £6.00 and Wakefield at £5.75. Take up is also seeing a surge in Bradford (£5.50) as well as Rotherham and Doncaster (both £5.00).
This marked increase in demand for quality industrial space once again affirms Yorkshire’s position as one of the UK’s key distribution locations, but also points towards the pressing issue of insufficient property development. The current results suggest that the demand for Grade A industrial space is particularly impacting upon the SME and mid-box sectors in the region, while big shed supply has seen a significant reduction.
Robert Whatmuff, head of office and director of Industrial & Logistics at LSH Yorkshire, said: “This quarter’s take up figures are cause for celebration, as they signal the growing desirability of the region’s major cities as distribution centres. This presents opportunities for landlords looking to undertake refurbishment of well-located, secondary space and make the most of pent-up occupier demands.
“However, developers and investors need to direct their attentions towards providing speculative developments as demand inevitably outstrips the supply. With encouraging signs of growth in the manufacturing sector, the second half of 2014 looks set to be a very exciting period for Yorkshire.”
LSH is currently supporting a number of Grade A speculative developments in 2014, with ongoing development taking place at Springwell Point in Leeds, Victory Park in Sheffield, and Trident Park in Normanton.
