Increased take up and demand could see rents for smaller industrial units in Teesside top £5 psf in the next 12 months, according to one of the area’s leading commercial property agents.
Stephen Brown, senior partner at Dodds Brown LLP, the largest independent commercial property surveying practice headquartered on Teesside, says lack of availability of smaller quality industrial stock in Teesside is already putting upwards pressure on rents which are presently moving up towards £4.50psf.
He says: “Despite the drop in the oil price, in the past six months we have experienced increased take up and demand for industrial units across Teesside and throughout the Tees Valley, as local businesses look to take advantage of improving economic conditions by expanding and moving into larger premises.
“However, with 90% of units already let at Riverside Park, one of the last available major industrial estates offering quality accommodation on Teesside, we already have a waiting list of prospective tenants looking for units of a specific size, whose requirements we cannot at present fulfil. With rents for industrial units of up to 3,000 sq ft soon to be touching £4.50psf, the £5psf barrier looks set to be broken sometime next year.”
Attracted by low interest rates and the increasing willingness of the banks to lend, some businesses with cash in the bank are looking to avoid increasing rents by acquiring the freeholds of industrial properties, but due to increasing shortage of properties freehold prices are also rising.
Mr Brown, who has worked in commercial property on Teesside for more than 30 years, continues: “We are working closely with public sector bodies, developers and landlords to bring new development opportunities, and new and refurbished properties to the market, but with a limited number of shovel ready development sites in the area, upwards rental pressure on industrial units of all sizes will only increase.”
Dodds Brown acts as agent for a number of properties on Riverside Park and for other industrial developments across the Tees Valley.
