Amongst the improving buzz of activity surrounding the industrial property sector in 2015, the balance between occupier demand and supply was thrown further off kilter, especially in the realm of sub 10,000 sq ft properties, meaning negotiations were reassuringly competitive; however, quality is something that isn’t being compromised on, in fact, it’s quite the opposite.
Businesses are increasingly thinking progressively and looking to expand in this upwards turning market, yet despite their desires to progress, they are being stilted in their growth through lack of industrial stock on the market. Consequently, we’ve seen rental levels strengthen for landlords over the last 12 months, and improving figures have been further intensified for vendors in the freehold market where stock is less frequently being brought to the market.
Unit 2 Hall View Drive was typical of this improved market momentum, where after just two viewings of the property, Sprite Labels took a 10 year term to facilitate their expansion plans. Chettles Trade Park and the Bloomsgrove Industrial Estate off Ilkeston Road together with the Blenheim Industrial Estate are some of the few remaining industrial estates where we still have availability, albeit limited.
Harrimans Court on the Lenton Lane Industrial Estate recently followed in the footsteps of a number of industrial estates around Nottingham by announcing full occupancy, and this is true of Morris Court, City Business Park and the Ropewalk Industrial Estate, which all reached full occupancy earlier in 2015.
The issue over the lack of available existing stock is not one which is going to disappear overnight, but it may not be long before the underlying expansion requirements of the larger local businesses, and a steady increase in both rental and freehold values, stimulates the prospect of new development.
FHP transacted over 1.5 million square feet of industrial space in 2015 and if the improving momentum in the industrial sector continues at a similar pace due to occupier demand, 2016 is set to be another successful year for the Industrial Team at FHP, where negotiations are predicted to be competitive and prices are expected to rise.
Lucinda Hancock of FHP’s Office and Industrial Team comments:
“There are increasingly fewer options for tenants to choose from within a variety of size brackets that are of real quality and the sub 2,000 sq ft bracket remains for example incredibly popular as do opportunities in the realm of 2,000-10,000 sq ft.
Freehold stock in particular remains hard to come by in the popular industrial areas and typically still attracts significant levels of interest when launched to the market effectively.
Quality does however still remain key as occupiers continue to expect perfect presentation whether purchasing or leasing, so it is still important that units are launched to the market best presented to ensure maximum chances of achieving a sale/letting swiftly and to maximise prices/rents achieved.”
