Prime and secondary industrial rents for large and small sheds in the North West of England have risen markedly between June 2014 and June 2015, according to the latest sector-specific research by Colliers International.
The analysis by the industrial and logistics division of the real estate advisors confirmed that an acute shortage of industrial and logistics space in the region is driving up rental levels in the primary and secondary markets for both big sheds of 100,000 sq ft plus and smaller sheds ranging in size from 10,000 sq ft to 30,000 sq ft.
In the 12 months between June 2014 and June 2015, the average prime rental value of a big shed in the North West rose by 15 per cent from £4.63 per sq ft to £5.31 per sq ft while average secondary rent increased by 14 per cent from £3.56 per sq ft to £4.25 per sq ft.
Prime rental values for big sheds in Greater Manchester and Warrington jumped by 16 per cent to £5.50 per sq ft from £4.75 per sq ft, in Liverpool by 17 per cent from £4.50 per sq ft to £5.25 per sq ft and in Lancashire by 11 per cent to £5.00 per sq ft from £4.50 per sq ft.
In the secondary market for big sheds, Manchester witnessed a 20 per cent rise from £3.75 per sq ft to £4.50 per sq ft while those in Liverpool jumped 14 per cent from £3.50 per sq ft to £4.00 per sq ft.
Colliers’ figures for the big shed secondary rental market in Warrington and Lancashire showed increases of 20 per cent and 23 per cent to £4.50 per sq ft (£3.75) and £4.00 per sq ft (£3.25) respectively.
The prime rental market for small sheds in the North West witnessed an eight per cent rise in rent per sq ft from £5.69 per sq ft in June 2014 to £6.13 per sq ft in June 2015.
There was a similar eight per cent hike in this market in Manchester from £6.00 per sq ft to £6.50 per sq ft while Lancashire saw a 10 per cent jump to £5.75 per sq ft from £5.25 per sq ft and in Warrington the rental level increased by eight per cent to £6.50 per sq ft from £6.00 per sq ft.
In the year to June 2015, the secondary rental market for North West small sheds rose by 13 per cent to £4.38 per sq ft from £3.88 per sq ft;
in Manchester by 12 per cent to £4.75 per sq ft (£4.25 per sq ft);
in Liverpool from £3.50 per sq ft to £4.00 per sq ft, representing a rise of 14 per cent;
and in Warrington and Lancashire by 12 per cent and 14 per cent to £4.75 per sq ft and £4.00 per sq ft from £4.25 and £3.50 per sq ft respectively.
Julien Kenny-Levick, director, industrial and logistics for the Manchester and Liverpool offices of Colliers International, said: “An increasingly acute shortage of new supply coupled with expansionary activity from occupiers keen to take advantage of more benign economic environment, meant that primary and secondary rents have seen sharp upward movement in the 12 months covered by our research.”
Len Rosso, head of industrial and logistics at Colliers International, said: “Prime asset rents are significantly up year and on year but for those occupiers trying to avoid paying the higher prices, the secondary market is the next option. This has increased demand for secondary stock so consequently, rental prices are also rapidly rising.”
