The amount of available prime industrial property available for businesses in the south has increased significantly this year and could present a turning-point in the market, according to Lambert Smith Hampton (LSH).
Industrial property specialists at LSH’s South Coast office report that the availability of prime industrial space increased by 17% in the second quarter of this year, compared with the start of 2017.
The total availability of prime industrial property – which is considered to be of the highest quality and in the most desirable locations – was 624,488 sq ft in Q2 2017 (up by 89,925 sq ft from Q1). The availability has also more than doubled in the last year – with a 58% increase amounting to an extra 229,028 sq ft of prime industrial space coming to market.
The boost is largely due to a number of new high-quality developments becoming ready for occupation, including Unit 3 Trilogy, a detached industrial 42,760 sq ft warehouse with offices in Segensworth.
The firm’s South Coast Industrial Market Pulse report, which covers the second quarter of 2017, also reports that the industrial market held up well, with demand remaining strong despite the uncertainty of a General Election and Brexit.
Adrian Whitfield, industrial and logistics director for the South Coast team of LSH, said: “While there remains a shortage of prime Grade A space, a number of high-quality developments coming to market are now easing that pressure and will be welcomed by businesses that have been crying out for these first-rate sites, better quality, higher eaves units with secure yards.
“This is the second quarter in a row we have seen an increase in supply and it could be seen as a turning-point that will allow the economy of the south to grow further.
“Going forward, we will witness a significant increase in the availability of prime stock as schemes such as Alpha Park, Chandlers Ford, and Mountpark, Southampton, complete and release some 350,000 sq ft into the market.”
Whitfield predicted that the take-up of prime stock was likely to increase throughout the rest of 2017, with a number of these units either already under offer or let with recent announcements of lettings to Coopervision 100,000 sq ft, Berendsens 60,000 sq ft and 20,000 sq ft to a national parcel distributor.
He added: “We are encouraged by the recent news that the economy has seen growth in the last quarter with both manufacturing and distribution sectors contributing to this. Increasingly, online retailers are looking for local warehousing and distribution solutions near large cities like Portsmouth and Southampton in order to be closer to their customers and provide faster delivery times.”
LSH also reports:
- Total take-up remained buoyant at 419,366 sq ft in Q2 – a slight decrease of 3% from the previous quarter.
- Secondary stock saw a decrease in availability, with the total standing at 1,608,673 sq ft, down year-on-year by 7% (120,354 sq ft). Nevertheless, secondary stock remains under high demand, with units on popular estates such as Nursling Industrial Estate, Chandlers Ford Industrial Estate and Fareham Reach having a constant turnaround.
- Rental levels have remained consistent through Q2.
- Significant transactions have included Proptech in a 24,690 sq ft unit at Daedalus Park, Lee-on-the-Solent, and B&Q in a 28,216 sq ft unit at Oriana Way, Nursling.
LSH, with offices in Fareham and Southampton, is a multi-award-winning commercial property specialist and a leader on the South Coast in the industrial property, office space, retail and investment markets.