The Grade B battleground – DTZ on industrial property
The overall volume of available industrial space in the UK market fell during the second quarter of 2010, as Grade A take-up remained strong and less Grade B and Grade C stock returned to the market, says DTZ in its quarterly review of the market.
There is a large volume of Grade B industrial property currently available, which is acting as a battleground for landlords, who are having to differentiate their offer in order to generate interest from occupiers, the group notes.
The outlook for prime industrial rents is stable, DTZ says – any changes in the balance of power between landlord and tenant are likely to be seen in a tightening of the incentive packages on offer, which are currently generous.
DTZ expects availability of industrial properties to peak in 2010, given the slowing rate of return of buildings over 50,000 sq ft to the market. It forecasts that take-up for the year will be about a third higher than in 2009 as demand improves. While take-up of buildings over this level in Q2 was down 15% from the Q1 level, take-up for the first half of this year is a huge 43% above the level seen in the first half of 2009.
“The number of enquiries received by DTZ agency teams has stabilised at around half that of peak levels since Q1 2009, however the current requirements in the market are more credible and those occupiers looking for space are now more committed to transacting ,” DTZ notes.
