Speculative Industrial Development expanding throughout UK

Posted on 8 May, 2015 by Chris Grigorovsky

According to DTZ, speculative development of industrial space over 50,000 sq ft, expanded outside the M1/M6/M25 corridors the first time since development recommenced towards the end of 2013.

Speculative Industrial Development expanding throughout UK

Two units totalling 138,000 sq ft in Chandlers Ford, Hampshire along with schemes throughout the South East, Midlands and Yorkshire are bringing a much needed of supply of Grade A space to the market.

Grade A availability saw an increase to 12.2m sq ft in the first quarter of this year, confirming the end of the downward trend which began in 2009 – leading to a 77 per cent fall in available space over the subsequent five years.

Occupiers continue to utilise the build-to-suit market which accounts for 84 per cent of Grade A take-up. Usually these deals are located in regional locations where there is low Grade A availability and speculative development has not restarted in a significant way.

Head of UK Research at DTZ, Ben Clarke, commented: “This increase in developer activity has been very welcome at the supply-starved prime end of the industrial market. With occupiers actively seeking out the highest quality buildings, we expect industrial prime rents to rise by 2.2% on aver per year over the next five years”.

Simon Lloyd, the Head of Industrial Agency at DTZ, added: “The shortage of grade A space has meant that occupiers have had to take a built-to-suit option with its longer lead-in time, or an older Grade B building in order to satisfy their property requirement.

“The increased Grade A supply generated by an accelerating speculative programme will mean that they are now more able to take a better building with operational benefits”.




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