A five year low in the availability of Worcestershire industrial property will push prices to record levels by the end of 2017, according to one of the county’s leading commercial property agents.
John Dillon, Managing Director at Worcestershire commercial property consultancy and Chartered Surveyors GJS Dillon Limited, says that there is only 15 months’ supply of manufacturing, warehousing and distribution space available in Worcestershire to meet the needs of businesses looking to expand.
He says: “At the start of 2016, there was just over two and half years’ available stock of industrial units remaining in the county. That’s now gone down to just a year and a quarter. The increasing shortage is putting ever more upwards pressure on prices and rents, so that by the end of this year (2017) we will certainly see records being broken, as new build industrial units up to 5,000 sq ft in the right location in the county will reach £120psf, while similar units to rent will break the £7psf barrier.”
GJS Dillon’s annual review of the Worcestershire industrial property market, using its own knowledge and figures from Co-Star, revealed that at present 1,746,849 sq ft of industrial stock is available, with only 436,406 sq ft available freehold. The average annual Worcestershire industrial take up over the last four years has been 1,341,125 sq ft.
Mr Dillon continues: “With continuing record low interest rates and the increasing willingness of the banks to lend to acquire property, freehold units are particularly highly sought after with business owners and company directors seeking to purchase buildings for their businesses through Self-Administered Pension Schemes. This desire for freeholds is likely to continue throughout 2017.”
According to Mr Dillon, the shortage of industrial units will be eased by some developments now underway.
He says: “Worcester 6 and Redditch Eastern Gate will start to ease the supply of larger industrial accommodation in the county (40,000 sq ft up to 150,000 sq ft), and Ratio Park is a start at the smaller level. But we need more developers to build units of 1,000 to 5,000 sq ft to buy, as well as units of 10,000 to 25,000 sq ft to buy and to rent.
“As a result of the shortage of industrial property, there has never been a better time to market an industrial property in Worcestershire and we would welcome the opportunity to advise more landlords. But this situation also means that businesses looking for new premises are having to spend more time and money searching, and if they do identify a suitable building they often miss out.
“Businesses cannot just look on-line, as by the time a property appears, it could already be too late. We encourage anybody looking for industrial or office premises in Worcestershire to register their needs with us, then they will be at the front of the queue when we put a new building on the market.
“Businesses looking for industrial units or warehouse space of 10,000 sq ft and offices of more than 5,000 sq ft or more can also use our specialist Business Relocation Service which will identify a business’s needs, space requirements and budgetary constraints and then search on and off the market for a property, as well as, if required, disposing of the old premises.”