Eastern M25 industrial market is flourishing – Glenny
Glenny says the industrial sector in the eastern M25 region has continued to flourish, despite the difficult economic conditions, with industrial take-up in the area reaching 5.8m sq ft in the first nine months of the year, and looking set to pass 7m sq ft for the full year.
The firm’s latest survey of the markets for industrial property in the northeast and southeast M25 areas shows that industrial occupier demand has remained buoyant in each of the past three years. Head of Agency, John Bell, notes that the level of unsatisfied demand for space has settled at around 6m sq ft per year, while take-up levels have been consistent with the long-run average of 6.5m sq ft per year. The only exception to this was a plunge in demand during the first half of 2009. “The prospects for the sector at that period of time looked particularly bleak, but the market has shown remarkable resilience and take-up levels recovered in the second half of the year and we haven’t looked back since,” Mr. Bell adds.
Glenny says its main concern now is the pipeline of good-quality floorspace for prospective occupiers. Overall supply levels have been rising in recent years, but the amount of new or Grade A space available has been contracting. At the end of 2007 and in early 2008, nearly 30% of stock was new or recently refurbished, but this figure has now fallen to just 5%, Glenny says.
Mr. Bell notes that there is currently only 1.3m sq ft of Grade A stock on the market in this region, which he says represents less than three months’ supply of stock at current take-up levels. “We are now in a position where the lack of good available space is beginning to have an adverse effect on the economic recovery prospects of the eastern M25 market,” he cautions.
