Sheds are on the up
Leasing activity in the industrial property market has been boosted by a revival in the UK’s industrial output, says CB Richard Ellis.
New research from the property consultancy says that the take-up of logistics property in Q1 2010 jumped to 4.5m sq ft, the second-highest quarterly figure since Q4 2007, and close to the long-term average of 4.6m sq ft.
Ian Kissane, director of UK research at CBRE, said: “If the level of industrial take-up experienced during the first quarter of 2010 continues for the rest of the year, the annual total will be around 18m sq ft, which is 30%–50% over 2008 and 2009 levels.”
By region, the Southeast and the Midlands saw the strongest demand, with the Southeast accounting for 34% and the Midlands for 51% of total take-up of industrial and logistics property in the quarter.
Paul Farrow, head of UK industrial agency at CBRE, says that the group has experienced a surge in enquiries in the past three months to satisfy demand for industrial and logistics property, as companies have raised investment in industrial activity as the UK economy recovers.
CBRE expects Q2 to be “equally positive” for the sector, noting that there is a relative shortage of new space in the market (four of the largest units available at the end of Q1 were second-hand).
Supply appeared to peak in Q4 last year, at 55.4m sq ft, the group says. During Q1 2010, available space declined by 2.5m sq ft to 52.9m sq ft, a reduction of 5% over the quarter.
“With supply levels starting to decrease, and encouraging Q1 levels of take-up being sustained in the early days of Q2, the UK logistics market is gaining positive momentum”, concluded Kissane.
