SHW – New Industrial space coming forward across London, South London and Surrey to meet significant demand
Rents have continued to rise due to demand significantly outweighing supply across the London, South London, M25 South East and M25 South West industrial markets, according to SHW’s Q1 2023 South East Industrial Focus.
In 2022, Croydon and the surrounding areas, rents increased from £16 per sq ft in 2021 to a highest £19.75 per sq ft achieved in 2022. Take up was just above 2021 levels with 453,000 sq ft let in 2022. With availability being halved to 670,000 sq ft and very strong logged demand (totalling 5.5 million sq ft).
In Sutton, Epsom, Chessington and Leatherhead, take up jumped in the second half of 2022, showing a significant increase by the end of 2022 to 178,000 sq ft (up from 102,000 in 2021). With a 1.2% vacancy (85,000 sq ft available) and total logged demand of 920,000 sq ft, rents increased from £15 to £17.50 per sq ft.
Redhill and Reigate recorded a relatively low take up of 48,000 sq ft in 2022, compared with 195,300 sq ft in 2021. Rental levels remained static at £13.95, however demand still outstrips the current availability for the right stock.
Alex Gale
Alex Gale, Partner at SHW, comments: “On the whole, 2022 saw a good level of take up across all size ranges, with lower take levels generally in locations where availability of good quality stock is restricted. As predicted, strong demand continues to be linked to logistics / B8, rather than B1 manufacturing, due to the continued need for space to serve online retailing / last mile logistics.
“In 2023 we have seen a strong occupier-led start to the year with over 150,000 sq ft of new lettings and sales in lawyers’ hands, particularly in the multi-let space. With six new development sites coming on stream over the next 24 months, much needed new stock will be added to the availability register.”
MI1 Gli
Among those new developments in the pipeline is MI1 in Mitcham. Developed by GLi, MI1 is a brand-new urban logistics park set in 13.5 acres on the doorstep of central London at Beddington Corner and on the popular Willow Lane industrial estate. The development offers sustainable, 100% electric units from 25,000 to 300,000 sq ft in a prime distribution area close to key road networks including the A23 and A205.
CR1
In Croydon, SHW is marketing GLi’s CR1 and CR2, providing a total of 110,000 sq ft of industrial space, with excellent sustainability credentials, located on the A23 to easily access London and the South East. While Phase 2 of Prologis Park, Beddington, located on Beddington Lane in Croydon will offer build-to-suit opportunities of up 90,000 sq ft. And Chancerygate and SGN’s Factory Lane logistics development, also in Croydon, will provide 14 units ranging from 1,000 to 14,000 sq ft, (totalling 95,000 sq ft) available to lease from Q4 2023.
In SW19, Threadneedle’s Merton 37 has now PC’d, offering a detached 37,631 sq ft, high specification warehouse/industrial unit, targeting EPC A and BREEAM Excellent and built to ‘Net Zero Carbon Ready’ for tenant fit out.
Construction of Saltwhistle Business Park in Redhill is well underway, providing business space from 5,310 to 31,546 sq ft, available to let in Q1 2023 and an additional 80,000 sq ft of high-quality industrial space is in the pipeline at Cox Lane, Chessington which will be coming to the market later this year.
Alex Gale, Partner at SHW, says: “We are delighted to be working closely with our developer clients to bring forward much needed industrial space for the South London and Surrey markets, replacing a lot of older stock that would struggle to be EPC compliant in future years. These new buildings offer the latest designs and features, with higher cubic capacities, to suit a range of occupiers.”
You can see all the commercial properties listed by SHW on NovaLoca here.
