South Yorkshire’s logistics and industrial property market is showing a surge in activity with deals 63 per cent up in the first half of 2017 over the same period last year.
Despite the uncertainty created by Brexit and the snap election call, the market has remained strong with take-up of units above 50,000 sq ft totalling 1.14m sq ft in H1 according to a report by property experts at Knight Frank.
The figures in Knight Frank’s Logistics and Industrial Commentary also show that the region is performing 27 per cent ahead of the five year average with take-up being driven by a variety of sectors.
Tom Swallow, senior surveyor at Knight Frank, said: “While third party logistics continues to dominate demand for large distribution units, enquiries from manufacturing occupiers across the Advanced Manufacturing District have increased, driven by the success of the Advanced Manufacturing Park, which is attracting inward investment to the region.
“There is a ready supply of land across South Yorkshire, schemes include 150,000 sq ft at Capitol Park in Barnsley, Smithywood, which offers 30 to 350,000 sq ft units, 100,000 to one million sq ft at Doncaster Distribution Centre and up to 400,000 sq ft at Tudor Cross.
“A key new site to the market is Peel Logistics Park in Sheffield, which will offer up to 865,000 sq ft once it achieves planning consent towards the end of the year.
“The lack of stock has seen a return to speculative development. Recent developments include the 75,000 sq ft ‘Helix’ unit at Barnsley, 195,000 sq ft at iPort’s IP2E premises, Vantage Phase II comprising two blocks of 18,000 sq ft and 21,000 sq ft, two 26,000 sq ft blocks at R Evolution at the AMP and the trade counter scheme at Quest Park developed by Marrtree.
“SP1 at Symmetry Park will also provide an additional 150,000 sq ft unit on completion in the first part of 2018. In general we are seeing good levels of demand on the back of recent speculative development.
”The success of R-Evolution at Gateway 36 has set the new level of premium rents at £5.50 per sq ft in Barnsley and good quality stock across the region continues to decline as occupiers search for high quality premises.
”The shortage of supply has driven rental grow and incentives continue to harden. We are starting to see deals with two to three months’ rent free on a five year term for sub 30,000 sq ft units, and four to six months on larger distribution premises. We expect this trend to continue as stock levels for good quality premises diminishes further.
“We expect to see increased development of large industrial units over 50,000 sq ft as the supply of stock diminishes and as enquiry levels increase following redevelopment of sites for higher value uses.”
