High market demand combined with a lack of sites and buildings resulted in a strong West Midlands industrial property market performance, according to commercial property surveyors Bulleys.
The explanation from Bulleys came as the latest RICS UK Commercial Property Market Survey highlighted industrial property in the region as “the clear outperformer”.
The RICS survey from the last quarter of 2017 also revealed that office space in the West Midlands had the highest demand in England, although the region’s retail sector continued to weaken.
Noel Muscutt, partner of Wolverhampton-based Bulleys, said: “These new findings reflect our experience that the West Midlands industrial property market continues to perform well.
“There is an upward pressure on both rents and capital values, a positive result of a shortage of both sites and good quality available industrial buildings, coupled with occupier demand remaining strong.
“As a consequence land values continue to rise, industrial investment yields continue to harden and the overall industrial property sector performance is continuing to be robust.”
The comment from Bulleys reflected the outlook of RICS findings which predicted that both prime and secondary industrial rents would rise sharply in the next year, balancing out the decline in retail.
Muscutt added: “We also expect this recipe of high demand, rising rents and values to result in continued success for industrial property in the West Midlands.”
Simon Rubinsohn, chief economist at RICS, said: “The weakish tone to the Q4 survey results for the retail sector sits alongside generally disappointing trading statements from the high street.
“The counterpart to this is the ongoing strength in demand for well-located warehouses to support the inexorable rise of the online consumer.
“Meanwhile in the office sector, the resilience of the headline rent indicator is masking the increasing attractive inducement packages required to encourage take up of space.”