Lambert Smith Hampton, recently announced as the leading industrial agency in the South East and in the UK, has launched its market briefing for 2015.
The report showed that take-up on the South Coast reached a record high of over 3m sq ft but raised concerns at the lack of supply, particularly for modern detached industrial/warehouse units in excess of 30,000 sq ft.
Due to this dearth of supply of units in the region, LSH predicts that speculative development will begin in earnest and due to the rise in build costs, rents in the area are due to increase, with headline rents moving from £7.50 per sq ft to £8.50 per sq ft.
LSH’s Director of Capital Markets and Business Space and Logistics, Jerry Vigus, comments; “We have been reporting our concerns for some time with regard to the lack of premises for occupiers and with a number of developers finally looking at speculatively constructing, planning applications are likely to be lodged in the next couple of months on at least two sites within the Southampton area.
“Due to rising build costs, including materials and labour which are outside developers’ control, in order for institutions to seriously consider speculatively developing units, rents will need to increase and we envisage that headline rents will be in the region of £8.50 per sq ft.
“As well as there being a shortage of detached industrial/warehouse units, there has also been a steady flow of take-up of smaller units and occupiers generally have fewer options for relocation. As a result, we’re expecting development, particularly of multi-let estates, to increase.”
