West Yorkshire property market ‘defies Brexit fears’
The industrial property market in West Yorkshire “remains strong” despite fears that the sector would be affected following the uncertainty caused by the general election and Brexit, a new report says.
Knight Frank’s latest Logic Report reveals that the West Yorkshire industrial market is expected to continue to perform well into the second half of 2017 with a number of available units under offer.
Prime rental levels for the mid-sized sub market concerning units ranging from 30,000 to 60,000 sq ft are expected to rise in the near future, with newly-completed and design & build options now being marketed at quoting levels of between £5.95 to £6.25 per sq ft.
Iain McPhail, partner with Knight Frank’s industrial property team in Leeds, said: “Occupier demand across the region remains steady with take-up of industrial and warehouse units of over 50,000 sq ft across West Yorkshire totalling over 700,000 sq ft in the first half of 2017 spanning 6 transactions.
“This represents more than double the level of take-up compared to the last six months of 2016.”
As with other regions, high-quality existing and new build industrial stock in the mid-size range remains in short supply.
“Knight Frank brokered the largest letting of the year so far in West Yorkshire involving the 190,000 sq ft Wakefield Eurohub building, which was let to Allied Glass in January. Consequently there is now a shortage of grade A ‘Big Sheds’ in West Yorkshire available.
“There are only a small handful of existing new and modern second hand warehouse units situated in the Normanton / Castleford area off junction 31 of the M62 including the 111,000 sq ft Gilcar 31 unit on Wakefield Europort and the recently refurbished Normanton 108 building which extends to 108,000 sq ft and is situated within the Normanton Industrial Estate.
“The lack of stock has contributed to an increase in design and build requirements, as companies struggle to identify existing units that can accommodate their exact needs. The development sites within the Leeds City Region Enterprise Zone in the Aire Valley such as Muse Developments’ Logic Leeds scheme are well-placed to accommodate this demand,” said McPhail.
According to the Logic Report, there continues to be a “severe” lack of industrial investment stock and opportunities in the local market and there is strong demand from all sectors.
Key investment transactions in H1 2017 include Wakefield Eurohub (190,000 sq ft) sold for £11.8m, reflecting a yield of 6.25% on a 10 year lease to Allied Glass, and Mamas & Papas – a sale and leaseback sold for £10.35m on a ten year lease, reflecting a yield of 8%.
